Answered: Must we have inequality for economic…

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter17: Institutions, Policies, And Cross-country Differences In Income And Growth

Section: Chapter Questions

Problem 8CQ

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Must we have inequality for economic growth?

A. Yes, disparities in income and wealth encourage hard work and saving.

B. Yes, the richer individuals are in society, the more they can invest their capital in society and produce jobs for all.

C. No, inequality stymies economic growth. More unequal nations grow less quickly than more equal societies - potentially due to speculative spending, and low healthcare outcomes and educational attainment for poorer people leading to less productivity.

D. No, it is mean spirited and makes people dislike each other.

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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Economic inequality is the inconsistent dissemination of income and opportunity between various gatherings in the public eye. It is a worry in practically all nations all over the planet and frequently individuals are caught in poverty with minimal opportunity to move up the social stepping stool.

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