In what ways can income redistribution be viewed as a public good?
What will be an ideal response?
Income redistribution may have many public benefits. It generates collective psychological benefits by making us feel better about ourselves. If it eliminates or reduces hunger, then disease may be reduced as well. There may be lower crime rates. However, income redistribution also suffers from the free-rider problem and the drop-in-the-bucket problem. Individuals can benefit from the drop in poverty even if they have not contributed. In addition, poverty is a huge problem and one person's contribution will likely have little effect.
You might also like to view...
In the aggregate expenditure model, ________ has both an autonomous component and an induced component
A) planned investment spending B) government spending C) consumption spending D) net export spending
An auction house is an example of a financial intermediary
a. True b. False Indicate whether the statement is true or false
Increases in productivity are not responsible for increased standards of living in the United States
a. True b. False Indicate whether the statement is true or false
Which of the following factors are most important for determining the economic growth of a country?
A. The independence of the country's central bank B. The country's level of resources C. The country's rates of saving and investment D. The level of sophistication of a country's financial markets