The most common argument for income redistribution is that
A. it provides more incentive for people to try to better themselves.
B. it works-it reduces the poverty rate.
C. a society as wealthy as the United States has a moral obligation to provide its members with the basic necessities of life.
D. it improves efficiency in the economy.
Answer: C
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Which of the following is not a reason for differences in total factor productivity across countries?
A) Differences in the size of population. B) learning by doing. C) barriers to the adoption of new technology. D) inefficient allocation of factors of production across firms in some countries.
Answer the following statements true (T) or false (F)
1. Mutually-cancelling advertising by monopolistic firms tend to improve economic efficiency in the industry. 2. Advertising increases the costs of firms and could be manipulative, therefore it does not really have a positive economic effect. 3. Unlike a monopoly, an oligopoly tends to achieve allocative efficiency due to the rivalry among several firms. 4. In a natural monopoly case, the socially-optimal pricing policy rule will often result in negative economic profits for the firm.