According to the Kuznets Hypothesis, as a country

Solution

The Kuznets Curve was introduced by economist Simon Kuznets in the 1950s. It describes the relationship between economic growth (measured by GDP per capita) and income distribution (inequality). The "Inverted U-Shape" Logic The hypothesis suggests that the path of inequality follows an inverted U-shape :

• Phase 1: Early Development (The Rise): In a pre-industrial society, everyone is relatively poor, and inequality is low. As industrialization begins, workers move from low-paying agricultural jobs to higher-paying industrial jobs. This creates a gap between the rural poor and the urban "nouveau riche," causing inequality to rise.
• Phase 2: The Turning Point: At a certain level of average income, the country reaches a peak of inequality.
• Phase 3: Mature Development (The Fall): As the economy matures, inequality begins to decrease. This happens due to several factors:
• Education: A more skilled workforce leads to higher wages for a larger portion of the population.
• Democratization and Policy: Governments often introduce progressive taxation, social safety nets, and labor unions.
• Labor Scarcity: As the economy expands, the demand for labor increases, driving up wages for the lower class.

• Option A: Describes a "divergence" theory (often associated with Thomas Piketty’s modern critiques), but it is the opposite of Kuznets' optimistic "long-run" view.
• Option B: Ignores the initial disruption caused by shifting from agriculture to industry.
• Option D: Is incorrect because the hypothesis is fundamentally built on the idea that economic structure and income distribution are dynamic and change over time.