Which of the Following Is Among the Arguments Against Using

question 28

Multiple Choice

Which of the following is among the arguments against using government intervention to reduce income inequality?

• A) Governments cannot have much of an impact on income inequality, so there is little use in making the attempt.
• B) A wide gap between the rich and the poor tends to promote active participation in the democratic process.
• C) Allowing big rewards to go to the most successful performers helps motivate creativity, innovation, and hard work.
• D) Large income differences eventually lead to political strife and will undermine support for a market economy.

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Definitions:

Common Stock

An equity security that signifies part ownership in a company, providing the owner with the right to vote and a portion of the company's earnings through dividends.

Credit

A financial term describing the ability of a buyer to receive goods or services before payment, based on the trust that payment will be made in the future.

Stockholders' Equity

The ownership interest of shareholders in a corporation, represented by the company's assets minus its liabilities.

Services

Services involve non-tangible tasks performed for a fee, offering benefits, help, or satisfaction to customers without producing physical goods.