Which of the Following Is a Benefit of Income Inequality

question 52

Multiple Choice

Which of the following is a benefit of income inequality?

• A)It motivates people to be at the high end of income distribution.
• B)It promotes economic growth in the less developed economies.
• C)It reduces the intensity of business fluctuations in an economy.
• D)It reduces the taxes to be paid by the ones in the low end of income distribution.

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Definitions:

Relevant Risk

The portion of an investment's risk that cannot be eliminated through diversification, related to factors affecting the market as a whole.

Hurdle Rate

The minimum rate of return on an investment that is required by a manager or investor to proceed with the investment.

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, often represented by the yield on government securities.

Expected Market Rate

The anticipated return on investment in the financial markets based on historical data and market analysis.