Answer to Question #209219 in Macroeconomics for Sye

Question

Describe the term rent seeking

Answer 1

Answer

Rent seeking is an economic term that means the effort to increase one's share of existing wealth without creating any new wealth or benefits to the society nor contribution of productivity.

This is achieved by manipulation of use of resources which lead to rise in income inequality and loss of government revenues.

Rent seeking also discourages innovation and activities include; government subsidies, grants,lobbies and tariffs.