Question

When transfer of income happens from the "not richer" individual to the "not poorer" individual, then such a transfer is known as

• A. Regressive transfer
• B. Additive transfer
• C. Direct transfer
• D. Indirect transfer

Answer 1

The Correct Option is A

In macroeconomics, a transfer of income from a "not richer" individual to a "not poorer" individual is termed as a regressive transfer. This concept describes a situation where the redistribution of income results in a relatively higher burden or less benefit for those with lower income compared to those with higher income, thus worsening income inequality. The defining characteristic of a regressive transfer is its adverse impact on equity, where resources flow from individuals with fewer financial means to those with more.