One Tradeoff Society Faces Is Between Efficiency and Equity

question 20

Essay

One tradeoff society faces is between efficiency and equity. Define each term. If the Canadian government redistributes income from the rich to the poor, explain how this action affects equity as well as efficiency in the economy.

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Definitions:

Dividends Declared

Profits distributed by a company to its shareholders out of its earnings, based on the number of shares owned.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders, often reinvested in the business or kept as a reserve.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor costs, but excluding indirect expenses.

Expense

An outflow of cash or other valuable assets from a person or company to another entity in exchange for goods or services.