As a Result of the Tradeoff Between Income Equality and Incentives

question 124

Multiple Choice

As a result of the tradeoff between income equality and incentives to work,what do we know about an optimal redistribution policy

• A)It can never be funded through taxes on wage income.
• B)It must always achieve a full egalitarian society.
• C)It is only consistent with transfers to the middle class.
• D)It always falls short of achieving a full egalitarian society.

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Definitions:

Mathematical Equations

Symbolic representations of relationships between variables or quantities, defined by mathematical operations.

Economic Hypothesis

A proposed explanation for economic phenomena that is testable and can be confirmed or refuted by observation and experimentation.

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A widely accepted generalization about the economic behavior of individuals or institutions.

Cause and Effect

A relationship between events where one or more are the result of the other(s), a fundamental concept in establishing correlations in various fields.