When the government redistributes income from the wealthy to the poor,
A)efficiency is improved,but equality is not.
B)equality is improved,but efficiency is not.
C)both efficiency and equality are improved.
D)neither efficiency nor equality are improved.

Question

Quizplus · Accepted Answer

When the government redistributes income from the wealthy to the poor, equality is improved but efficiency is not. This is because redistribution policies typically involve higher taxes on the wealthy, which can reduce the incentives for them to work, invest, and innovate. As a result, economic growth may be slower, and there may be less overall income to redistribute in the future. However, redistribution can help to reduce poverty, inequality and social unrest.

When the Government Redistributes Income from the Wealthy to the Poor