The theory of income distribution studies how incomes are determined in a market economy.

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The theory of income distribution indeed studies how incomes are determined in a market economy. It focuses on understanding the factors that influence how economic resources are allocated among individuals or groups and how the resulting income is distributed. This involves examining the role of factors such as labor supply and demand, capital accumulation, market power, government policies, and social norms and institutions. Theories of income distribution aim to explain the pattern of income inequality in a society, and how it affects economic growth, stability, and welfare.

The Theory of Income Distribution Studies How Incomes Are Determined