There is a trade-off between equity and efficiency in that policies designed to promote equity often come at the cost of decreased efficiency.

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Policies like progressive taxation, minimum wage laws, and social welfare programs may promote equity by redistributing wealth and resources to disadvantaged individuals, but they can also decrease economic efficiency by creating disincentives to work or invest. Therefore, there is a trade-off between equity and efficiency in the design of economic policies.

There Is a Trade-Off Between Equity and Efficiency in That