Robinhood effect is related to which of the following ?
1) Income and consumption
2) Income generation
3) Income redistribution
4) Income taxation
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The correct answer is Income redistribution .
The Robin Hood effect is an economic occurrence where income is redistributed so that economic inequality is reduced. The effect is named after Robin Hood, said to have stolen from the rich to give to the poor.
Objectives of Income Redistribution
The core objectives of the Robin Hood effect are highlighted below;
The redistribution of wealth and income in an economy.
To create a reduction in economic inequality and provide more opportunities for those who are less well-off in society.
To relieve the burdens of the poor and make them gain more financial stability at the expense of the rich, such as a reduction in taxes paid by the poor and increase in taxes paid by the wealthy.
The Robin Hood effect also support that provision of public services funded by the tax paid by the rich, such provisions will be benefited by the poor members of the society.