Which of the following is a predictable side effect of increased government activity (e.g., taxes and subsidies) designed to redistribute income among citizens?

Question

Quizplus · Accepted Answer

Increased government activity to redistribute income can create opportunities for rent-seeking activity, where individuals or firms use their resources to gain privileges and benefits from the government rather than through productive activities. This is because government interventions can distort the market forces and create an incentive for individuals to lobby for government interventions that suit their interests. Therefore, an increase in rent-seeking activity is a predictable side effect of government activity for income redistribution.

Which of the Following Is a Predictable Side Effect of Increased