Which of the Following Is True About the Income-Transfer System

question 14

Multiple Choice

Which of the following is true about the income-transfer system in the United States?

• A) The system provides more output for lower-income households than the market alone provides.
• B) Transfer payments solve the problem of income inequality.
• C) The system does not affect the distribution of income because of regressive taxes.
• D) The system is actually progressive and gives more income to rich households.