Market economies promote disparities in income distribution even when resources are optimally utilised. Substantiate this observation

Nivedha,

Market economies promote disparities in income distribution even when resources are optimally used. This is because of the following reasons.

1. Products on which the returns are high get more resources. It means that the more goods are being produced for the rich or elite class of the society. It means poor sections are not being able to get the needed products.
2. Market economies belive more on the jobs outsourcing. Outsourcing of jobs is done from those countries where there is cheap labour(labour is available at less cost). Since, jobs are being outsourced, domestic employment get reduced. So, we can say that, even if profits are rising, GDP wage component is continuously falling.

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