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Chapter 15: Q. 28 (page 378)

Identify some public policies that can reduce the level of economic inequality.

Short Answer

Expert verified

Some public policies that can reduce the

level of economic inequality are :

-Opportunity hierarchy

-Less unskilled immigrants

-Wealth redistribution

-Incentives and Income Equality tradeoff

Step by step solution

01

: Economic inequality

Economic inequality is the unequal distribution of earnings and opportunity among one of a kind companies in society. it is a problem in almost all countries round the sector and regularly people are trapped in poverty with little risk to climb up the social ladder.

02

: Opportunity hierarchy 

Income inequality can be reduced by proving the same level of opportunities to every child, irrespective of the place and region they have grown up.

for example, a student from a backward region attending a low-quality school may have the same skill set but fewer opportunities than compared to a student from high-quality education create the difference.

03

Step 3. Wealth redistribution

Redistribution of wealth by taking it from the high-income group and providing it to the low-income group can help balance the distribution of wealth.

04

Step 4. Incentives and Income Equality tradeoff 

Imposing high taxes on high earning groups can discourage them from working will impact incentives as well & that discouragement leads to the balanced distribution of income.

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Most popular questions from this chapter

Explain a situation using the supply and demand for skilled labor in which the increased number of college graduates leads to depressed wages. Given the rising cost of going to college, explain why a college education will or will not increase income inequality.

We have discovered that the welfare system discourages recipients from working because the more income they earn, the less welfare benefits they receive. How does the earned income tax credit attempt to loosen the poverty trap?

How does the TANF attempt to loosen the poverty trap?

What are the main reasons economists give for the increase in inequality of incomes?

Describe how each of these changes is likely to affect poverty and inequality:

a. Incomes rise for low-income and high-income workers, but rise more for the high-income earners.

b. Incomes fall for low-income and high-income workers, but fall more for high-income earners.
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