Identify the incorrect statement from the following ........

Economics (CUET) Government Budget and Economy

Identify the incorrect statement from the following.

A government budget is an annual financial statement showing item wise estimates of expected revenue and anticipated expenditure during a fiscal year.

A government uses monetary instruments of taxation and subsidies with a view of improving the distribution of income and wealth in the economy.

A government undertakes commercial activities that are of the nature of natural monopolies; and which are established and managed for social welfare of the public.

A government reduces the inequality in the distribution of income and wealth by imposing taxes on the rich and giving subsidies to the poor, or spending more on welfare of the poor.

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Explanation:

Option (2) is correct.
Explanation: Budget of a government shows its comprehensive exercise on the taxation and subsidies. A government uses fiscal instruments of taxation and subsidies with a view of improving the distribution of income and wealth in the economy. A government reduces the inequality in the distribut of income and wealth by imposing taxe poor, on the rich and giving subsidies to the or spending more on welfare of the poor. It reduces income of the rich and raises the living standard of the poor, thus, leads to equitable distribution of income.