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Progressive income taxation serves which objective of the government budget?
ACurrency issue
BDebt recovery
CRedistribution
DAllocation
Answer & Solution
Correct answer: C. Redistribution
1. Under a progressive structure, a higher income attracts a higher rate.
2. That shifts the burden towards those better able to bear it.
3. Changing the income distribution this way is the **redistribution** function.
4. Allocation concerns providing public goods the market will not supply, which is a separate objective.
_Source: NCERT Class 12 Introductory Macroeconomics, Ch 5 "Government Budget and the Economy", section 5.1.1 Objectives of Government Budget_
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