Inequalities of incomes in Economic Systems

Inequalities of income refer to the unequal distribution of income among individuals in a society. Economic systems differ in the degree of income inequality they allow.

Capitalist Economic System

Under the capitalist economic system, income inequality is relatively high. This is because the system is based on the principles of competition and profit maximization, which can result in some individuals accumulating vast amounts of wealth while others struggle to make ends meet. The capitalist system rewards those who are able to work harder or smarter than others or who are lucky enough to have access to resources that are in high demand.

Mixed Economic System

In a mixed economic system, income inequality can vary depending on the specific policies and regulations in place. The degree of income inequality can be reduced by implementing policies such as progressive taxation, social welfare programs, and minimum wage laws. However, in mixed economic systems, the distribution of income is still likely to be unequal, as some individuals will always have more skills, abilities, and resources than others.

Socialist Economic System

The socialist economic system is based on the principle of economic equality, and income inequality is relatively low. In a socialist system, the means of production are owned and controlled by the state or the community, and everyone is entitled to a share of the wealth generated by the economy. This means that income is distributed more evenly, and there is less of a gap between the rich and the poor.

Conclusion

In conclusion, the correct answer is option 'B': socialist economic system. This is because the socialist system is based on the principle of economic equality, and income inequality is relatively low.

Since socialist economy focuses on fulfilling the needs and necessities of common people along with welfare of people. It also produces goods according to need rather than desire in the economy. Hence we can say that Inequalities is comparatively less in socialist economy than capitalist or mixed economic market .