Question

Which of the following is true about income inequality?

Income inequality is necessary to establish social stability.

In order for a country to be productive, a system of income inequality requires significant government redistribution of wealth and thus relatively high taxes.

An economic system with significant income inequality can lead to political inequalities.

None of the listed answers is true.

The greater the income inequality, the less efficiently an economy operates.

Answer 1

Income inequality means unequal distribution of income across the various individual in an economy.

An economic system with a significant income inequality can lead to a political inequalities. This statement is true about the income inequality.

When the income or wealth distribution is concentrated in the hands of small number of individual, political power tends to support in favor of that small number of individual.

So, the correct answer is " A economic system with a significant income inequality can lead to a political inequalities".