Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?

Question

Quizplus · Accepted Answer

Enacting policies to make the distribution of income more equal may lead to a distortion of incentives. For example, if taxes are increased on high earners and benefits are increased for low earners, high earners may become less motivated to work and innovate, while low earners may become less motivated to improve their skills and education. This could lead to a less efficient allocation of resources. Unchanged behavior is less likely to occur because people tend to respond to changes in incentives. Therefore, option B is the most likely outcome.

Which of the Following Is Most Likely to Occur When