Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 15: Q.28 (page 378)

Identify some public policies that can reduce the

level of economic inequality.

Short Answer

Expert verified

-Opportunity hierarchy

-Wealth redistribution

-Incentives and Income Equality tradeoff

Step by step solution

01

Step 1.Meaning 

Economic inequality means unequal distribution of income among individuals in a group.

02

Step 2. 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 low-income area attending an underfunded 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. This can occur in the form of taxation which is used for subsistence programs for those who need it.

04

Step 4. Incentives and Income Equality tradeoff 

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

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Who are the near-poor?

Consider two of the income security programs in the United States: Temporary Assistance for Needy Families (TANF) and the Earned Income Tax Credit (EITC).

a. When a woman with Children and very low income earns an extra dollar, she receives less in TANF benefits. What do you think is the effect of this feature of TANF on the labor-supply of low-income women? Explain.

b. The EITC proves greater benefits as low-income workers earn more income (up to a point). What do you think is the effect of this program on the labor-supply of low-income individuals? Explain.

c. What are the disadvantages of eliminating TANF and allocating the savings to EITC?

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.

Suppose there are two possible income distributions in a society of ten people. In the first distribution, nine people would have incomes of \(30,000 and one person would have an income of \)10,000. In the second distribution, all ten people would have incomes of $25,000.

a. If the society had the first income distribution, what would be the utilitarian argument for redistributing income?

b. Which income distribution would Rawls consider more equitable? Explain.

c. Which income distribution would Nozick consider more equitable? Explain.

Describe how a push for economic equality might

reduce incentives to work and produce output. Then

describe how a push for economic inequality might not

have such effects.
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free