Because there is a trade-off 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

Policies designed to equalize income distribution, such as progressive taxation or income redistribution programs, may reduce the incentives for individuals to work hard and invest in businesses, leading to a decrease in overall productivity and output. In contrast, policies that foster economic growth and expansion, such as investment in education and infrastructure or tax cuts for businesses, may result in greater inequality in the short run but may ultimately benefit the economy as a whole by creating new jobs and increasing overall prosperity. Therefore, while there may be a tension between output and equality, promoting equality at the expense of output is not necessarily the optimal solution.

Because There Is a Trade-Off Between Total Output and Equality