ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The well-worn assertion that the rich get richer while the poor get poorer echoes Karl Marx’s theory of immiseration which said that capitalists could only become richer by lowering wages, thereby reducing the living standards of workers until they had no choice but to revolt.

Detailed explanation-2: -In a simple explanation: The Rich operates in Abundance mode, while the Poor operates in scarcity mode. Abundance – You give more because you are already in a better position, which in return attracts more returns. And the Rich habit effect is passed on.

Detailed explanation-3: -Many rich people have become poor people by making lousy financial decisions. Some, for example, invest in businesses that go under–perhaps businesses that their friends are starting, or businesses of their own that they aren’t savvy enough to run profitably.

Detailed explanation-4: -The short answer: Many countries adopt policies such as tax breaks and financial incentives for businesses to boost economies amid crises like the pandemic. Central banks flood the economy with money to make it easier to lend and spend. This helps the wealthy grow their money through financial market investments.