According to the "big tradeoff,"
A)income transfers reduce efficiency.
B)efficiency requires income transfers.
C)a more equally shared pie results in a larger pie.
D)property rights and voluntary exchange insure equality of opportunity.
E)income transfers should make the poorest person as well off as possible.

Question

Quizplus · Accepted Answer

The "big tradeoff" suggests that income transfers (such as welfare programs) may help to reduce poverty and inequality, but they can also reduce economic efficiency by creating disincentives to work and reducing the incentives for individuals to invest in education and training. Therefore, there is a tradeoff between equity and efficiency.

According to the "Big Tradeoff