An economy is experiencing a widening gap in both wealth and income inequality, with the Gini coefficient for wealth reaching 0.75 and the Gini coefficient for income reaching 0.45.
To address these disparities, the government is considering a comprehensive reform of inheritance tax, with all revenues ring-fenced to fund a universal capital endowment ('baby bonds' or capital grants) awarded to every citizen at age 25.
Evaluate whether this policy combination is the most effective method for a government to significantly reduce inequalities in both the distribution of income and the distribution of wealth.
76 exam-style questions on AQA A Level Economics 1.7 The distribution of income and wealth: poverty and inequality (A-level only), covering 1.7.1 The distribution of income and wealth, 1.7.2 The problem of poverty, and 1.7.3 Government policies to alleviate poverty and to influence the distribution of income and wealth. Each one has a worked solution and a mark scheme showing where the marks go.