Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Economic growth leads to a more equal income distribution due to increased supply of jobs.
B
Economic growth can exacerbate income inequality as demand for skilled labor increases faster than for unskilled labor.
C
Economic growth has no effect on income distribution since it affects only total output.
D
Economic growth results in uniform income distribution across all sectors.
Understanding the Answer
Let's break down why this is correct
Answer
Economic growth refers to an increase in the production of goods and services in an economy over time. When the economy grows, it often leads to higher demand for products, which can create more jobs and increase wages. However, not everyone benefits equally from this growth; some people may see their incomes rise significantly, while others may not see much change at all. For example, if a tech company expands due to high demand for its products, the skilled workers may receive higher salaries, while unskilled workers may not experience the same increase. This difference in income growth can lead to a wider gap between the rich and the poor, highlighting the importance of how resources are allocated during economic growth.
Detailed Explanation
Economic growth can lead to more jobs, but not all jobs are the same. Other options are incorrect because This idea suggests that more jobs will help everyone equally; This option claims growth only affects total output, not income.
Key Concepts
Economic growth
Supply and demand
Income distribution
Topic
Economic Growth and Resource Allocation
Difficulty
hard level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.