Answer to Question #96799 in Macroeconomics for Emily

Question

Critically comment: When you give the rich a bigger slice of the pie, the slices of the others my become smaller in the short run, but the poor will enjoy bigger slices in absolute terms in the long run, because the pie will get bigger.

Answer 1

the rich have become so (rich) because they know how to properly manage resources, increase available resources. If we assume that a rich man prepares a pie, and he gives 20% of the pie to the poor, then tomorrow, increasing resources, the rich will prepare the pie twice as much, and give the poor the same 20%. but tomorrow's 20% will be more than today's 20%. because the rich make the cake, and the poor eat it.

The same can be explained by the expression: "money works and multiplies when you invest it in something, and not when you keep it at home under your pillow.

You can also read this article:

https://www.forbes.com/sites/objectivist/2011/06/14/when-it-comes-to-wealth-creation-there-is-no-pie/#18ac1e507a2c