Economics (AS & A Level) · May / June 2021 · Paper 33 · Question 15

The Gini coefficient of a country is 0.40. The poorest income earners in this country pay no income tax. The government increases the tax rate on the highest income earners, which results in a more even distribution of income. What could be concluded from this?

1. AThe Gini coefficient falls and the income tax system becomes more progressive.
2. BThe Gini coefficient falls and the income tax system becomes more regressive.
3. CThe Gini coefficient rises and the income tax system becomes more progressive.
4. DThe Gini coefficient rises and the income tax system becomes more regressive.

As printed in the paper