Fiscal policy enables direct income redistribution

Steps:

• Identify the goal: greater income equality requires reducing disparities in wealth distribution.
• Evaluate policy types: assess which directly targets income via government intervention.
• Compare impacts: fiscal tools like taxes and transfers explicitly address inequality.
• Select best fit: fiscal policy aligns most closely with redistribution objectives.

Why A is correct:

• Fiscal policy uses progressive taxation and welfare spending to transfer resources from high to low earners, directly reducing the Gini coefficient of income inequality.

Why the others are wrong:

• B: International trade policy focuses on exports/imports, indirectly affecting jobs but not targeted redistribution.
• C: Monetary policy controls interest rates and money supply, stabilizing prices but not addressing income gaps.
• D: Supply side policy boosts production and incentives, potentially increasing overall growth but widening inequality via tax cuts for the wealthy.

Final answer: A