Since a trade-off exists between total output and equality of income distribution,
A)greater equality of distribution will generally result in higher levels of output.
B)greater output is generally associated with more equal distribution.
C)policies designed to increase output will only succeed if distribution is more equal.
D)policies intended to expand output must necessarily fail.
E)policies designed to equalize distribution may adversely affect the size of output.

Question

Quizplus · Accepted Answer

The statement suggests that there is a trade-off between total output and equality of income distribution, meaning that trying to increase one may come at the cost of reducing the other. Therefore, policies designed to equalize income distribution may have negative effects on the size of total output. This implies that greater equality of distribution does not necessarily result in higher levels of output, which rules out option A. Option B is also incorrect, as the statement suggests that greater output may come at the cost of less equal distribution. Options C and D are extreme and incorrect.

Since a Trade-Off Exists Between Total Output and Equality of Income