When a Government Policy Alters the Distribution of Income to Achieve

question 32

Multiple Choice

When a government policy alters the distribution of income to achieve greater income equality,which of the following will happen?

• A)Incentives for earning income are distorted.
• B)Consumers alter their behavior in response to the policy.
• C)The new allocation of resources is less efficient than the pre-policy allocation.
• D)All of the above are correct.

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Definitions:

Potential Liability

Potential liability refers to the possibility that a person or entity may be held legally responsible for actions or consequences in the future.

Third Party

An entity or individual not directly involved in a legal contract or agreement, but that may be affected by it or participate in certain transactions.

Accountant's Work

Professional activities undertaken by an accountant, including auditing, financial reporting, and tax planning.

Criminal Liability

The legal responsibility for a person or entity for criminal actions or omissions that violate laws, leading to prosecution and punishment.