Multiple Choice
Which of the following is an effect of absolute poverty that also contributes to its cyclical nature?
94
views
16. Income Inequality and Poverty
Income Inequality in the USA and Worldwide
Multiple Choice
Which of the following is an assumption commonly made by arguments in support of income equality?
A
Markets always distribute income fairly without intervention.
B
Greater income equality leads to increased social welfare.
C
Income inequality is necessary for economic growth.
D
All individuals have identical preferences and abilities.
Verified step by step guidance1
Step 1: Understand the context of the question, which asks about assumptions commonly made in arguments supporting income equality. This means identifying which statement aligns with the rationale behind promoting income equality.
Step 2: Analyze each option carefully. The first option, 'Markets always distribute income fairly without intervention,' is generally not an assumption supporting income equality; rather, it is often challenged by proponents of income equality who argue for intervention.
Step 3: The second option, 'Greater income equality leads to increased social welfare,' reflects a common assumption in arguments supporting income equality, as many theories suggest that reducing income disparities improves overall social welfare.
Step 4: The third option, 'Income inequality is necessary for economic growth,' is typically an argument against income equality, so it is not an assumption supporting it.
Step 5: The fourth option, 'All individuals have identical preferences and abilities,' is a strong and unrealistic assumption not commonly made in support of income equality; it is more related to simplifying assumptions in economic models.
Related Videos
Related Practice
