Risk-taking contributes to income inequality because:

Question

Quizplus · Accepted Answer

Risk-taking can lead to either high financial returns or significant loss, creating a wider gap in income distribution between those who succeed and those who fail. As a result, the rewards from risk-taking fluctuate widely and contribute to income inequality. Option A is incorrect as the size of the risk may also affect the returns, and it is not a constant factor. Option C is incorrect as not all risk-takers are high-income earners. Option D is incorrect as not all risk-takers face bankruptcy, and option E is incorrect as not all risk-takers receive financial help from governments.

Risk-Taking Contributes to Income Inequality Because