Question

Government provides essential items of food grains almost free to the families below the poverty line. Which objective the government is trying to fulfil through the government budget and how? Explain.

Answer 1

By providing essential items of food grains almost free to the families below the poverty line, government is trying to reduce the gap between the rich and the poor. Government taxes the rich and spends the amount on the poor. This reduces disposable income of the rich and increases the disposable income of the poor.