Which of the following correctly describes the relationship between economic efficiency and economic equity?
A)They are both automatically achieved in a free market economy.
B)They always call for opposite outcomes.
C)There is no conflict between the two goals.
D)There is often a trade-off between the two.

Question

Quizplus · Accepted Answer

Economic efficiency refers to the optimal allocation of resources while economic equity refers to the fair distribution of resources. Often, achieving one goal may come at the expense of the other. For example, policies that increase economic equity by redistributing wealth or income may reduce economic efficiency by discouraging productivity or investment. On the other hand, policies that promote economic efficiency such as reducing regulations or taxes may worsen economic equity by increasing income inequality. Therefore, there is often a trade-off between economic efficiency and economic equity.

Which of the Following Correctly Describes the Relationship Between Economic