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B the individuals to whom income is given because

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Unformatted text preview: uals from whom income is taken – because they have high income – have less incentive to exert effort to create that income. B. the individuals to whom income is given – because they have low income – have less incentive to exert effort to create their own income. C. Both A and B. D. None of the above. 8. There is likely no trade-off between redistribution and wealth creation at extreme levels of inequality because A. poverty can motivate people to exert more effort. B. poverty can cause poor self-esteem, crime and insurrection, all of which undermine productivity. C. very high levels of wealth encourage laziness. D. All of the above. 9. Consider Figure 7-1. “Economic theory implies that society should choose point “A” on this curve”. True or false? A. True. B. False. 36 WEALTH CREATION A WEALTH REDISTRIBUTION Figure 8.1 10. A cost-effective policy redistribution policy A. is one that has no impact on wealth-creation incentives. B. is one that achieves a target level of redistribution with the lowest poss...
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