Which of the following is a feature of the 'Wealth Inequality' literature associated with Piketty?
A. Wealth inequality always declines with development
B. Capital accumulation always reduces inequality
C. When the rate of return on capital exceeds the growth rate of the economy, wealth inequality tends to rise
D. Only labour income inequality matters
Answer: Option C
Solution (By JKSSB Mock Tests)
Piketty’s central argument is that when the rate of return on capital (r) systematically exceeds the growth rate of the economy (g), the share of capital in national income and the concentration of wealth tend to increase.
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