Critics of the wealth gap might argue that economic growth will likely decline over time. the upper classes cannot help create new jobs. the wealthy become unable to make investments. buying power exceeds the supply from producers.
The correct answer and explanation is:
Correct Answer: Economic growth will likely decline over time.
Explanation:
Critics of the wealth gap argue that extreme income inequality can negatively affect a country’s long-term economic growth. When wealth is concentrated in the hands of a few, the majority of people have limited access to resources, education, healthcare, and opportunities. This creates a large segment of the population that cannot fully participate in or contribute to the economy.
Economic growth depends heavily on consumer demand. The wealthy, despite their financial resources, can only consume so much. In contrast, when income is distributed more evenly across the population, a larger number of people can afford goods and services. This increases overall demand, which drives production, encourages business expansion, and creates jobs. However, if the majority of income is held by a small group, consumer demand weakens because the middle and lower classes—who make up most of the population—lack purchasing power.
Furthermore, a high wealth gap can lead to reduced investment in human capital. If poorer individuals cannot access quality education or healthcare, it limits the development of a skilled workforce, which is crucial for innovation and productivity. Over time, this hinders national competitiveness and reduces the potential for sustainable economic growth.
In societies with a large wealth gap, political instability can also rise, as frustration grows among those who feel left behind. This can lead to social unrest, discourage investment, and disrupt markets—all of which slow economic progress.
Thus, critics warn that unless the wealth gap is addressed, the economy may stagnate or grow at a much slower pace. Addressing inequality—through policies such as fair taxation, access to education, and improved social safety nets—can lead to more inclusive growth and a more stable, thriving economy in the long run.