The equity-efficiency trade-off means that the result of obtaining __________ in equality is also to obtain __________ in the so-called size of the pie.
A) no change; a decrease
B) no change; an increase
C) a decrease; a decrease
D) an increase; a decrease

Question

Quizplus · Accepted Answer

The equity-efficiency trade-off suggests that efforts to reduce inequality may lead to a decrease in overall economic efficiency or the size of the pie. The more resources are devoted to achieving equality, the less resources may be left for investment, innovation, and entrepreneurship, which can lead to negative effects on economic growth and productivity. Therefore, option D is the best choice as it suggests that obtaining an increase in equality can lead to a decrease in the size of the pie.

The Equity-Efficiency Trade-Off Means That the Result of Obtaining __________