Article Summary in a January,2017 Report,the World Economic Forum Stated That the That

question 15

Multiple Choice

Article Summary
In a January,2017 report,the World Economic Forum stated that the growing income gap has become one of the biggest threats to the global economy and cannot be remedied solely by higher economic growth.Although income inequality has fallen over the past 30 years on a global level,in high-income countries like the United States and the United Kingdom,the top 1% of income earners have benefitted disproportionately from economic growth.This has led a growing belief that the traditional model for economic growth does not result in a population-wide increase in income.According to the report,"The growing mood of anti-establishment populism suggests we may have passed the stage where [reviving economic growth] alone would remedy fractures in society: reforming market capitalism must also be added to the agenda."
Source: Lauren Gensler,"Rising Income Inequality Is Throwing The Future Of Capitalism Into Question,Says World Economic Forum," Forbes,January 11,2017.
-Refer to the Article Summary.The article discusses income inequality and how economic growth alone is no longer resulting in a more equitable distribution of income.Would an equitable distribution of income necessarily be the most efficient distribution of income?

• A)Yes,equitable and efficient are two different words which have the same definition.
• B)Yes,in order for the distribution to be equitable,it must also be efficient.
• C)No,it is impossible to have an economically efficient distribution which is also an equitable distribution.
• D)No,an economically efficient distribution of income would not necessarily be equitable.

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Definitions:

Market Value

The price at which an asset would trade in a competitive auction setting, reflecting the current value assigned by the market.

Discount

The reduction applied to the nominal price of goods, services, or securities, often to accelerate sales or investment.

Common Stock

A type of security that represents ownership in a corporation, entitling the holder to vote at shareholder meetings and to receive dividends.

Noncompensatory

Refers to plans or benefits that do not provide compensation or remuneration, typically used in contexts related to employee benefit plans that do not compensate for services performed.