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This is the defining feature of a progressive tax."},{"text":"A tax where the average tax rate falls as income rises.","correct":false,"explanation":"This describes a regressive tax, where lower-income people pay a greater percentage of their income. A progressive tax instead has an average rate that increases as income rises."},{"text":"A tax where the same tax rate applies at every income level.","correct":false,"explanation":"A constant percentage describes a proportional tax, not a progressive one. Progressivity requires the average tax rate to rise for people with higher incomes."},{"text":"A tax where the same cash amount is paid at every income level.","correct":false,"explanation":"A fixed cash payment would take a smaller proportion of income from richer taxpayers, but it does not define a progressive tax. Progressivity concerns rising average tax rates."}]},{"id":"76c740f3-3be2-4f56-8c07-bb435d43f14b","cardType":"basic","points":2,"front":"How does a progressive income tax reduce inequality?","back":"Higher earners pay a larger proportion of income, narrowing the after-tax income gap.","mcqOptions":[{"text":"Higher earners pay a larger proportion of income, narrowing the after-tax income gap.","correct":true,"explanation":"Higher-income households contribute a greater percentage of their income, reducing the difference between incomes after tax. This narrows disposable-income inequality, although it may create efficiency costs."},{"text":"Higher earners pay a smaller proportion of income, narrowing the after-tax income gap.","correct":false,"explanation":"Paying a smaller proportion would leave high earners relatively better off and usually widen the after-tax gap. Redistribution requires higher earners to surrender a larger share of income."},{"text":"Lower earners pay a larger proportion of income, narrowing the after-tax income gap.","correct":false,"explanation":"This reverses the progressive mechanism and places a heavier relative burden on poorer households. It is characteristic of a regressive structure, which tends to increase inequality."},{"text":"All earners pay the same cash amount of income, narrowing the after-tax income gap.","correct":false,"explanation":"A uniform cash payment would not directly ensure that higher earners contribute more as a share of income. The progressive effect comes from rising average rates across income levels."}]},{"id":"28a86737-089e-4003-b635-61296687a467","cardType":"basic","points":1,"front":"What tax structure is illustrated by the progressive tax example?","back":"The first £20,000 is taxed at 10%; income above £20,000 is taxed at 40%.","mcqOptions":[{"text":"The first £20,000 is taxed at 10%; income above £20,000 is taxed at 40%.","correct":true,"explanation":"This structure applies a lower marginal rate to the initial band and a higher marginal rate to income above the threshold. Consequently, the average tax rate rises as total income increases."},{"text":"The first £20,000 is taxed at 40%; income above £20,000 is taxed at 10%.","correct":false,"explanation":"The rates are reversed, making the marginal burden fall for income above the threshold. That would work against progressivity rather than producing the example's rising average rate."},{"text":"All income up to £20,000 is taxed at 10%; all income above £20,000 is taxed at 50%.","correct":false,"explanation":"The upper rate is overstated by ten percentage points. Although this remains progressive, it is not the tax structure used in the stated example."},{"text":"The first £40,000 is taxed at 10%; income above £40,000 is taxed at 40%.","correct":false,"explanation":"The threshold has been incorrectly doubled. This delays the application of the higher marginal rate and does not match the example's £20,000 income band."}]},{"id":"c382b471-5dc6-4cdf-8ed2-e26d5805efae","cardType":"basic","points":1,"front":"How much tax does Person B pay on a £100,000 income in the example?","back":"Person B pays £34,000: £2,000 on the first £20,000 and £32,000 on the remainder.","mcqOptions":[{"text":"Person B pays £34,000: £2,000 on the first £20,000 and £32,000 on the remainder.","correct":true,"explanation":"The first £20,000 generates £2,000 at 10%, while the remaining £80,000 generates £32,000 at 40%. Adding these liabilities gives a total tax payment of £34,000."},{"text":"Person B pays £40,000: £4,000 on the first £20,000 and £36,000 on the remainder.","correct":false,"explanation":"This applies 20% to the first band and 45% to the remainder, rather than the example's 10% and 40% rates. The resulting total is therefore too high."},{"text":"Person B pays £32,000: £2,000 on the first £20,000 and £30,000 on the remainder.","correct":false,"explanation":"The first-band calculation is correct, but the remainder is understated by £2,000. Applying 40% to £80,000 gives £32,000, producing the stated total."},{"text":"Person B pays £38,000: £8,000 on the first £20,000 and £30,000 on the remainder.","correct":false,"explanation":"The first band has incorrectly been charged at 40%, while the remainder has been understated. The example applies only 10% to the initial £20,000."}]},{"id":"9189d720-f34a-457a-b3ba-dd394e148a84","cardType":"basic","points":2,"front":"Why is the example's tax system progressive?","back":"Person B's average tax rate is 34%, compared with Person A's 10%.","mcqOptions":[{"text":"Person B's average tax rate is 34%, compared with Person A's 10%.","correct":true,"explanation":"Person B pays £34,000 from £100,000, giving a 34% average rate, while Person A faces 10%. The higher average rate at the higher income demonstrates progressivity."},{"text":"Person B's average tax rate is 40%, compared with Person A's 10%.","correct":false,"explanation":"The 40% figure is the marginal rate on income above £20,000, not the average rate across all income. The initial band taxed at 10% lowers Person B's average to 34%."},{"text":"Person B's average tax rate is 10%, compared with Person A's 34%.","correct":false,"explanation":"The rates have been assigned to the wrong people. Person B earns £100,000 and pays £34,000 overall, whereas Person A's lower income is subject to a 10% average rate."},{"text":"Person B's average tax rate is 24%, compared with Person A's 10%.","correct":false,"explanation":"This understates Person B's liability, often caused by applying the higher rate to only part of the remainder incorrectly. The example's total payment of £34,000 means a 34% average rate."}]},{"id":"c3999626-4abb-4706-ac23-afea50343f95","cardType":"basic","points":1,"front":"Which three tools can governments use to redistribute income?","back":"Taxes, transfer payments and direct provision.","mcqOptions":[{"text":"Taxes, transfer payments and direct provision.","correct":true,"explanation":"Governments can redistribute through taxes, payments such as benefits or pensions, and direct provision of services such as education or healthcare. Together these affect disposable income and access to resources."},{"text":"Interest rates, exchange rates and import quotas.","correct":false,"explanation":"These are mainly macroeconomic or trade policy instruments, not the three redistribution tools identified here. Redistribution specifically uses taxation, transfers and government-provided goods or services."},{"text":"Subsidies, tariffs and nationalisation.","correct":false,"explanation":"These policies can influence production, trade or ownership, but they are not the specified set of tools for redistributing income. The relevant categories include taxes, transfers and direct provision."},{"text":"Price controls, monetary policy and deregulation.","correct":false,"explanation":"These measures primarily affect prices, aggregate demand or market regulation. They may have distributional effects, but they are not the core three instruments listed for deliberate income redistribution."}]},{"id":"57488d2c-1c9d-49af-a7a6-ed1eea89ce5d","cardType":"basic","points":2,"front":"What trade-off affects the choice of equity policy?","back":"They trade an equity gain against efficiency costs and administrative complexity.","mcqOptions":[{"text":"They trade an equity gain against efficiency costs and administrative complexity.","correct":true,"explanation":"Equity policies can make income distribution fairer, but they may weaken incentives, reduce efficiency or require costly administration. Policymakers therefore weigh the equity improvement against these disadvantages."},{"text":"They trade an efficiency gain against equity costs and administrative complexity.","correct":false,"explanation":"This reverses the usual primary objective of redistribution. Equity policies seek a fairer distribution, while any efficiency improvement is not the gain identified in this trade-off."},{"text":"They trade an equity gain against efficiency gains and lower administrative complexity.","correct":false,"explanation":"Redistribution may involve efficiency losses and administrative burdens, not guaranteed gains and reductions. The policy choice requires recognising these potential costs alongside the equity benefit."},{"text":"They trade an equal income outcome against efficiency costs and administrative complexity.","correct":false,"explanation":"Equity does not necessarily mean identical incomes, and redistribution usually aims for fairness rather than complete equality. The stated trade-off concerns an equity gain alongside possible costs."}]},{"id":"a1a561a1-91fc-46dd-8141-533bb8884e45","cardType":"basic","points":2,"front":"How do inheritance and capital taxes reduce inequality?","back":"Inheritance and capital taxes reduce wealth passed between generations, lowering stock inequality over time.","mcqOptions":[{"text":"Inheritance and capital taxes reduce wealth passed between generations, lowering stock inequality over time.","correct":true,"explanation":"Taxing inherited wealth and capital accumulation reduces the assets transferred or retained across generations. Over time, this can limit unequal wealth stocks and improve the distribution of resources."},{"text":"Inheritance and capital taxes increase wealth passed between generations, lowering stock inequality over time.","correct":false,"explanation":"Increasing intergenerational transfers would generally preserve or widen existing wealth differences. These taxes reduce the wealth passed on, which is why they can lower stock inequality."},{"text":"Inheritance and capital taxes reduce income earned between generations, lowering stock inequality over time.","correct":false,"explanation":"The policy targets accumulated wealth and transfers of assets, not an undefined flow of income between generations. Confusing wealth stocks with income flows changes the mechanism being described."},{"text":"Inheritance and capital taxes reduce wealth passed within one generation, raising stock inequality over time.","correct":false,"explanation":"The relevant transfer is from one generation to the next, and reducing it can lower stock inequality. The option changes both the time relationship and the predicted distributional effect."}]},{"id":"2c741b3c-f4ac-471e-a2bf-d071cf116463","cardType":"basic","points":2,"front":"Why might very high progressive or inheritance tax rates become less effective?","back":"Very high tax rates can increase avoidance and evasion and weaken work incentives, reducing revenue and equity gains.","mcqOptions":[{"text":"Very high tax rates can increase avoidance and evasion and weaken work incentives, reducing revenue and equity gains.","correct":true,"explanation":"High rates can encourage people to avoid or evade tax and reduce their incentive to work, so revenue and improvements in equity may be smaller."},{"text":"Very high tax rates can eliminate avoidance and evasion and strengthen work incentives, increasing revenue and equity gains.","correct":false,"explanation":"High rates do not eliminate avoidance, evasion or disincentives to work. The correct explanation is that these responses can reduce revenue and equity gains."},{"text":"Very high tax rates can increase tax compliance and employment, reducing administrative costs and equity gains.","correct":false,"explanation":"Higher rates may instead encourage avoidance, evasion and weaker work incentives. These effects can reduce revenue and equity gains, rather than simply lowering administration costs."},{"text":"Very high tax rates can remove income differences and guarantee rising revenue, strengthening work incentives and equity gains.","correct":false,"explanation":"Tax rates cannot guarantee rising revenue or remove all income differences. Excessively high rates may weaken work incentives and encourage avoidance and evasion."}]},{"id":"6bc1bbbc-ddfb-46aa-ad54-a6b3c9cbb916","cardType":"basic","points":1,"front":"What are universal benefits?","back":"Payments made to everyone in a category regardless of income, such as all pensioners.","mcqOptions":[{"text":"Payments made to everyone in a category regardless of income, such as all pensioners.","correct":true,"explanation":"Universal benefits are paid to every person within a defined category, without testing their income or wealth; state pensions for all pensioners are an example."},{"text":"Payments made only to people whose income is below a threshold, such as unemployed households.","correct":false,"explanation":"Restricting payments according to income describes means-tested benefits. Universal benefits are paid to everyone in the relevant category regardless of income."},{"text":"Payments made to workers according to the amount of tax they have previously paid.","correct":false,"explanation":"Universal benefits do not depend on an individual's previous tax contributions. They are paid to everyone within a category, regardless of income."},{"text":"Payments made only to households with children and no employment income.","correct":false,"explanation":"Limiting support to households with particular incomes or employment circumstances is a form of targeting or means testing, not a universal benefit."}]},{"id":"3e62636f-be3b-405d-97fc-ae2f45cdf3d9","cardType":"basic","points":1,"front":"What are means-tested benefits?","back":"Payments restricted to people whose income and wealth fall below a set level.","mcqOptions":[{"text":"Payments restricted to people whose income and wealth fall below a set level.","correct":true,"explanation":"Means-tested benefits are targeted at people below specified income and wealth thresholds, concentrating support on those judged most in need."},{"text":"Payments made to people whose income and wealth rise above a set level.","correct":false,"explanation":"Means testing restricts support to people below the relevant thresholds. Those above the income and wealth limits generally do not qualify."},{"text":"Payments made to everyone regardless of their income and wealth or employment status.","correct":false,"explanation":"Payments made regardless of income and wealth are universal benefits. Means-tested benefits instead depend on being below specified financial limits."},{"text":"Payments restricted to people whose employment and tax payments fall below a set level.","correct":false,"explanation":"Eligibility is assessed mainly using income and wealth, not simply employment or previous tax payments. The financial thresholds determine access to means-tested support."}]},{"id":"9ca2182a-da88-43f7-a92e-40714b182d4b","cardType":"basic","points":2,"front":"What is the main equity and cost trade-off of universal benefits?","back":"Universal benefits are simple and avoid low take-up, but they also pay the rich, increasing fiscal cost.","mcqOptions":[{"text":"Universal benefits are simple and avoid low take-up, but they also pay the rich, increasing fiscal cost.","correct":true,"explanation":"Universal payments are easy to administer and less likely to be missed, but giving them to affluent recipients means more public money is spent."},{"text":"Universal benefits are complex and cause low take-up, but they exclude the rich, reducing fiscal cost.","correct":false,"explanation":"Universality generally simplifies access and avoids non-claiming. It does not exclude rich recipients, which is why universal benefits can have a higher fiscal cost."},{"text":"Universal benefits are simple and avoid low take-up, while excluding the rich and eliminating fiscal cost.","correct":false,"explanation":"Universal benefits do not exclude wealthy recipients or eliminate their cost. Their trade-off is simple access against paying people who do not need support."},{"text":"Universal benefits require detailed income checks and avoid paying the rich, but increase administrative cost.","correct":false,"explanation":"Universal benefits avoid detailed means testing and do pay wealthy recipients. Their main cost concern is the larger total spending caused by broad eligibility."}]},{"id":"a27e41c4-d698-4acd-adb2-c3c3c6b438ce","cardType":"basic","points":2,"front":"Why can means-tested benefits be both efficient and problematic?","back":"Means-tested benefits target the poorest and cost less, but benefit withdrawal can create a poverty trap and low take-up.","mcqOptions":[{"text":"Means-tested benefits target the poorest and cost less, but benefit withdrawal can create a poverty trap and low take-up.","correct":true,"explanation":"Targeting concentrates limited funds on poorer households, but withdrawing support as earnings rise can reduce work incentives and discourage eligible people from claiming."},{"text":"Means-tested benefits target the richest and cost more, but benefit withdrawal strengthens work incentives and guarantees high take-up.","correct":false,"explanation":"Means testing targets poorer households and can cost less, while withdrawal may weaken work incentives and discourage claims through a poverty trap."},{"text":"Means-tested benefits target the poorest and cost less, but benefit withdrawal removes the poverty trap and guarantees full take-up.","correct":false,"explanation":"Withdrawal can create a poverty trap by reducing the gain from extra earnings, and complicated or stigmatising claims can lead to low take-up."},{"text":"Means-tested benefits pay everyone equally and cost less, but benefit withdrawal increases employment and prevents unused support.","correct":false,"explanation":"Means-tested benefits are targeted rather than equal for everyone. 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Its purpose is to top up low incomes automatically."},{"text":"A payment made manually through a benefits office to replace all incomes below a threshold.","correct":false,"explanation":"The policy operates automatically through the tax system and supplements low incomes; it does not require manual claims or replace all income."},{"text":"A universal payment made through the tax system to increase the incomes of high earners.","correct":false,"explanation":"Negative income tax targets incomes below a threshold, rather than paying high earners universally. It is designed to improve support for low-income households."}]},{"id":"4806be94-1917-428d-8018-9ea309e722d3","cardType":"basic","points":1,"front":"What is a universal basic income?","back":"A flat, unconditional payment made to every citizen, regardless of income or employment.","mcqOptions":[{"text":"A flat, unconditional payment made to every citizen, regardless of income or employment.","correct":true,"explanation":"Universal basic income gives every citizen the same payment without conditions related to income or employment, so it is both universal and unconditional."},{"text":"A means-tested payment made only to citizens whose income is below a threshold.","correct":false,"explanation":"A means-tested payment is restricted by income, whereas universal basic income is paid to every citizen regardless of income."},{"text":"A flat payment made only to employed citizens according to their earnings.","correct":false,"explanation":"Universal basic income is not conditional on employment or adjusted according to earnings. Every citizen receives the same unconditional payment."},{"text":"A payment made to every household, varying according to wealth and number of dependants.","correct":false,"explanation":"A universal basic income is paid to each citizen at a flat rate, not adjusted according to household wealth or the number of dependants."}]},{"id":"6339a437-1cb3-4a08-b3a9-98533260e661","cardType":"basic","points":2,"front":"Why can a universal basic income remove the poverty trap?","back":"Because it is never withdrawn, extra earnings are kept in full, removing the poverty trap and claiming stigma.","mcqOptions":[{"text":"Because it is never withdrawn, extra earnings are kept in full, removing the poverty trap and claiming stigma.","correct":true,"explanation":"Since the payment does not fall as earnings rise, recipients keep the full benefit from working more, avoiding the poverty trap and reducing claiming stigma."},{"text":"Because it is withdrawn as earnings rise, extra earnings are taxed heavily, removing the poverty trap and claiming stigma.","correct":false,"explanation":"Withdrawal can create a poverty trap by reducing the reward from extra earnings. 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Its non-withdrawal as earnings rise removes the poverty trap."}]},{"id":"88d72b62-505c-452c-8b2d-56eff302e030","cardType":"basic","points":2,"front":"What is the main drawback of a universal basic income?","back":"A UBI is fiscally expensive and requires high taxes, which may weaken work incentives.","mcqOptions":[{"text":"A UBI is fiscally expensive and requires high taxes, which may weaken work incentives.","correct":true,"explanation":"A universal payment to everyone requires substantial public funding, usually through higher taxation. The resulting tax burden can reduce the reward from working and weaken labour supply incentives."},{"text":"A UBI is inexpensive to administer and always strengthens work incentives.","correct":false,"explanation":"Although universal payments can simplify administration, funding them for the whole population is costly, and higher taxes may reduce the incentive to work. 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The relevant concern is the taxation needed to fund it and the possible reduction in work incentives."}]},{"id":"4a9fd4f7-51cc-4b9c-adfe-5aa614399be1","cardType":"basic","points":1,"front":"What does a national minimum wage do?","back":"A legal wage floor that increases the hourly pay of the lowest-paid workers.","mcqOptions":[{"text":"A legal wage floor that increases the hourly pay of the lowest-paid workers.","correct":true,"explanation":"A national minimum wage sets the lowest legal hourly rate employers may pay. It directly raises pay for workers whose previous wages were below the new statutory floor."},{"text":"A legal wage ceiling that limits the hourly pay of the highest-paid workers.","correct":false,"explanation":"A minimum wage is a lower limit, not an upper limit, on pay. A wage ceiling would restrict the maximum wage, whereas this policy aims to raise the hourly earnings of low-paid workers."},{"text":"A voluntary wage guideline that employers can use to reduce hourly pay.","correct":false,"explanation":"Employers are legally required to meet the minimum wage, so it is not merely voluntary guidance. The policy establishes a wage floor intended to increase the hourly pay of the lowest-paid workers."},{"text":"A government payment that replaces the hourly wages of unemployed workers.","correct":false,"explanation":"The minimum wage is paid by employers to employees and does not replace earnings with a government benefit. It sets a legal lower limit for hourly pay in employment."}]},{"id":"24ceced8-bec4-4c98-9a74-e7673e0050f8","cardType":"basic","points":3,"front":"Why does the employment effect of a minimum wage depend on the labour market?","back":"If set above equilibrium, it may cause unemployment; under monopsony, it may increase both wages and employment.","mcqOptions":[{"text":"If set above equilibrium, it may cause unemployment; under monopsony, it may increase both wages and employment.","correct":true,"explanation":"In a competitive labour market, a wage floor above equilibrium creates excess labour supply and unemployment. A carefully set minimum wage can instead correct monopsony power and raise both pay and employment."},{"text":"If set below equilibrium, it always causes unemployment; under monopsony, it reduces both wages and employment.","correct":false,"explanation":"A wage floor below equilibrium is non-binding and does not create unemployment. Under monopsony, an appropriate minimum wage can raise wages and employment by limiting the employer’s wage-setting power."},{"text":"If set above equilibrium, it always increases employment; under monopsony, it causes unemployment at every level.","correct":false,"explanation":"In a competitive market, setting the wage floor above equilibrium can leave more workers seeking jobs than firms demand. Monopsony does not make unemployment inevitable because a suitable rate may increase employment."},{"text":"If set at equilibrium, it reduces wages; under monopsony, it increases wages but always reduces employment.","correct":false,"explanation":"A wage floor at equilibrium normally leaves the market outcome broadly unchanged. Under monopsony, a suitable minimum wage may increase both wages and employment, rather than necessarily reducing employment."}]},{"id":"94c4f3d5-3eec-4ff0-8453-c1a82b0e967a","cardType":"basic","points":2,"front":"How can state provision improve equity and efficiency?","back":"Education and healthcare raise the poor's real incomes and improve long-run productivity.","mcqOptions":[{"text":"Education and healthcare raise the poor's real incomes and improve long-run productivity.","correct":true,"explanation":"State-funded education and healthcare provide valuable services to poorer households, increasing their effective or real income. They also build human capital and health, raising productivity over the long term."},{"text":"Education and healthcare raise the poor's nominal incomes and reduce long-run productivity.","correct":false,"explanation":"State provision does not primarily raise workers’ cash wages, so nominal income is not the key effect. Education and healthcare increase real living standards and improve productivity through human capital."},{"text":"Education and healthcare lower the poor's real incomes and improve short-run consumption only.","correct":false,"explanation":"Providing essential services free or subsidised generally increases poorer households’ real income by reducing their necessary spending. The benefits also extend beyond current consumption through improved long-run productivity."},{"text":"Education and healthcare raise the poor's disposable incomes and eliminate all productivity differences.","correct":false,"explanation":"State provision can improve effective living standards, but it does not eliminate every productivity difference. The relevant benefits are higher real incomes and improved long-run productivity, not guaranteed equal productivity."}]},{"id":"0242745b-c11b-462c-b686-b8c332481f45","cardType":"cloze","points":null,"front":"A progressive tax takes a rising proportion of income as income rises, so the [ ] increases with income.","back":"A progressive tax takes a rising proportion of income as income rises, so the average tax rate increases with income.","mcqOptions":[{"text":"average tax rate","correct":true,"explanation":"A progressive tax takes a larger percentage of income as income rises. Since average tax rate means total tax divided by total income, this rate increases for higher-income taxpayers."},{"text":"marginal tax rate","correct":false,"explanation":"The marginal tax rate applies to the next unit of income and may rise under progressive taxation, but the sentence specifically describes the proportion of total income paid in tax: the average tax rate."},{"text":"total tax revenue","correct":false,"explanation":"Total tax revenue is the amount collected by the government, not the proportion of an individual’s income paid in tax. Progressivity is identified here by the increasing average tax rate."},{"text":"tax-free allowance","correct":false,"explanation":"A tax-free allowance is the income that can be received before tax is charged, and it does not represent the proportion of income paid. The relevant measure is the average tax rate."}]},{"id":"44ce33e2-bb64-4178-908f-9f4e3324d1d6","cardType":"cloze","points":null,"front":"Means-tested benefits target the poorest, but withdrawing them as earnings rise can create a [ ].","back":"Means-tested benefits target the poorest, but withdrawing them as earnings rise can create a poverty trap.","mcqOptions":[{"text":"poverty trap","correct":true,"explanation":"A poverty trap occurs when withdrawing benefits as earnings rise leaves little or no improvement in disposable income. The high effective marginal tax rate can therefore discourage additional work or earnings."},{"text":"wealth effect","correct":false,"explanation":"A wealth effect describes how a change in wealth influences spending or labour decisions. Benefit withdrawal as earnings increase instead creates a poverty trap by sharply reducing the gain from working more."},{"text":"fiscal drag","correct":false,"explanation":"Fiscal drag occurs when inflation pushes incomes into higher tax brackets or reduces the real value of allowances. Losing benefits as earnings rise is instead the mechanism behind a poverty trap."},{"text":"balance of payments deficit","correct":false,"explanation":"A balance of payments deficit concerns transactions between a country and the rest of the world. Benefit withdrawal affecting incentives and disposable income is a domestic poverty trap issue."}]},{"id":"f918af0a-3528-4270-a9e0-92c97b7e1d2e","cardType":"cloze","points":null,"front":"A negative income tax automatically tops up low incomes through [ ], improving take-up.","back":"A negative income tax automatically tops up low incomes through tax records, improving take-up.","mcqOptions":[{"text":"tax records","correct":true,"explanation":"Using existing tax records allows the negative income tax to identify low earners and make payments automatically. This reduces the need for separate applications and improves benefit take-up."},{"text":"means tests","correct":false,"explanation":"Means tests assess eligibility for targeted benefits, but the mechanism described uses information already held by the tax system. Tax records enable automatic payments and reduce non-take-up."},{"text":"employment tribunals","correct":false,"explanation":"Employment tribunals resolve workplace disputes and do not routinely administer income top-ups. A negative income tax can improve take-up by operating automatically through information in tax records."},{"text":"private insurance schemes","correct":false,"explanation":"Private insurance requires individuals to arrange and usually pay for cover, so it would not automatically identify and support low incomes. Tax records provide the administrative route for automatic top-ups."}]},{"id":"4cde5e62-b1c5-4f91-bbf5-c3aeb3c4ed4d","cardType":"cloze","points":null,"front":"A UBI is never withdrawn, so [ ] are kept in full.","back":"A UBI is never withdrawn, so extra earnings are kept in full.","mcqOptions":[{"text":"extra earnings","correct":true,"explanation":"Because a universal basic income is not withdrawn when someone earns more, the payment does not create a withdrawal rate on additional income. Consequently, extra earnings remain available in full."},{"text":"benefit withdrawals","correct":false,"explanation":"A UBI is specifically designed not to be withdrawn as earnings rise, so there are no benefit withdrawals reducing the gain from work. The income retained in full is extra earnings."},{"text":"tax payments","correct":false,"explanation":"A UBI may require taxation to finance it, so tax payments are not automatically kept in full. The relevant advantage is that additional earnings do not reduce the universal payment."},{"text":"housing subsidies","correct":false,"explanation":"Housing subsidies are separate means-tested support and may be withdrawn or adjusted according to income. A UBI leaves additional earnings fully retained because its payment does not taper away."}]},{"id":"1438f2a0-73f5-4f36-af89-02bac48c8a32","cardType":"cloze","points":null,"front":"A minimum wage set above the [ ] can raise unemployment.","back":"A minimum wage set above the equilibrium wage can raise unemployment.","mcqOptions":[{"text":"equilibrium wage","correct":true,"explanation":"The equilibrium wage balances labour demand with labour supply. A legal minimum above this level creates excess labour supply, meaning more people seek work than firms wish to employ."},{"text":"reservation wage","correct":false,"explanation":"The reservation wage is the lowest wage an individual is willing to accept, not the market-clearing benchmark. Unemployment may rise when the minimum exceeds the equilibrium wage."},{"text":"average wage","correct":false,"explanation":"The average wage describes existing earnings but does not identify where labour demand equals labour supply. The relevant threshold is the equilibrium wage in the labour market."},{"text":"maximum wage","correct":false,"explanation":"A maximum wage is an upper legal limit and is not the market-clearing reference point. A minimum wage can create unemployment when it is set above the equilibrium wage."}]},{"id":"038614d3-3c3e-491e-a72a-895a610b7809","cardType":"cloze","points":null,"front":"The most effective affordable package combines progressive taxes with targeted transfers, in-work support, and state provision of [ ].","back":"The most effective affordable package combines progressive taxes with targeted transfers, in-work support, and state provision of education and health.","mcqOptions":[{"text":"education and health","correct":true,"explanation":"State-provided education and healthcare improve access to essential services and opportunities regardless of income, supporting greater equity while complementing progressive taxes, transfers, and incentives to work."},{"text":"defence and policing","correct":false,"explanation":"Defence and policing are public services, but they do not directly expand low-income households’ human capital and access to essential care. The equity-focused package therefore prioritises education and health."},{"text":"roads and airports","correct":false,"explanation":"Transport infrastructure may support economic growth, but its benefits are not necessarily targeted towards disadvantaged households. State provision of education and health addresses inequality of opportunity more directly."},{"text":"courts and prisons","correct":false,"explanation":"Courts and prisons support the legal system but are not the key merit services used to reduce inequality of opportunity. Affordable equity policies instead emphasise education and health."}]}]}],"examCountdown":null,"heading":"8.2.5 policies towards equity and equality","title":"8.2.5 policies towards equity and equality Flashcards","topbar":{"backHref":"/international-a-level/economics/cie/flashcards"},"topicSidebar":"$L90"}]}],"topicId":"31b64e70-0495-4280-aeee-76206a19b1d0","walled":"$L91"}],"$L92","$L93"]