📚 Learning Guide
Capitalism vs. Socialism
easy

What is a primary reason for the greater income inequality often observed in capitalist economies compared to socialist ones?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Private ownership of resources allows individuals to accumulate wealth more rapidly.

B

Socialism inherently discourages wealth accumulation.

C

Capitalist economies have more government intervention.

D

Socialism promotes competition among individuals.

Understanding the Answer

Let's break down why this is correct

Answer

A primary reason for greater income inequality in capitalist economies compared to socialist ones is how wealth and resources are distributed. In capitalism, individuals and businesses can own private property and make profits, which often leads to some people becoming very wealthy while others remain poor. For example, if someone starts a successful tech company, they can earn millions, while others may struggle to find jobs that pay a living wage. In contrast, socialist systems aim to distribute resources more equally, often providing basic needs like healthcare and education to everyone, which helps reduce the gap between rich and poor. This difference in how wealth is managed and shared is a key factor in the income inequality seen in these two economic systems.

Detailed Explanation

In capitalist economies, people can own businesses and property. Other options are incorrect because Some think socialism stops people from getting rich; Many believe that more government rules in capitalism leads to less inequality.

Key Concepts

Capitalism
Socialism
Income Inequality
Topic

Capitalism vs. Socialism

Difficulty

easy 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.