6. Should a nation’s income be distributed to its members according to their contributions to the production of that total income or according to the members’ needs? Should society attempt to equalize income or economic opportunities? Are the issues of equity and equality in the distribution of income synonymous? To what degree, if any, is income inequality equitable? [LO18B.3]7. Do you agree or disagree with the following statement?

Explain your reasoning. “There need be no trade-off between equality and efficiency. An efficient economy that yields an income distribution many regard as unfair may cause those with meagre income rewards to become discouraged and stop trying. Hence, efficiency is undermined. A fairer distribution of rewards may generate a higher average productive effort on the part of the population, thereby enhancing efficiency. If people think they are playing a fair economic game and this belief causes them to try harder, an economy with an equitable income distribution may be efficient as well.”1

[LO18B.3]