Question

Identify some public policies that can reduce the

level of economic inequality.

Short answer

-Opportunity hierarchy

-Wealth redistribution

-Incentives and Income Equality tradeoff

Step-by-step solution

Step 1.Meaning 

Economic inequality means unequal distribution of income among individuals in a group.

Step 2. Opportunity hierarchy 

Income inequality can be reduced by proving the same level of opportunities to every child, irrespective of the place and region they have grown up.

For example, a student from a low-income area attending an underfunded school may have the same skill set but fewer opportunities than compared to a student from high-quality education create the difference.

Step 3. Wealth redistribution

Redistribution of wealth by taking it from the high-income group and providing it to the low-income group can help balance the distribution of wealth. This can occur in the form of taxation which is used for subsistence programs for those who need it.

Step 4. Incentives and Income Equality tradeoff 

Imposing high taxes on high-earning groups can discourage them from working and will impact incentives as well & that discouragement leads to the balanced distribution of income.