It is argued that measures taken to reduce inequality may decrease economic efficiency because

Question

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The argument is that reducing inequality may decrease economic efficiency because people will have less incentive to produce if their incomes are unrelated to their productivity. This suggests that economic efficiency is linked to incentives for productive work, which may decline if the rewards of productivity are reduced. Options A and C make unsupported claims about the productivity of poor versus rich people and the nature of goods and services produced for different income groups. Option B suggests that reducing inequality may enhance economic efficiency by providing opportunities for education and training, but this is not the argument presented. Option D implies that reducing inequality may lead to increased saving and lower consumption, but there is no reason why this trade-off would necessarily lead to lower output.

It Is Argued That Measures Taken to Reduce Inequality May