What is one effect of reduced economic mobility due to wealth inequality?

Reduced economic mobility due to wealth inequality often results in lower overall spending in the economy. When wealth is concentrated in the hands of a few, those with less economic power tend to have limited purchasing capabilities. As a consequence, their ability to spend on goods and services diminishes, leading to reduced overall demand in the economy.

Additionally, a lack of economic mobility means that individuals from lower-income backgrounds may not have the resources to invest in opportunities that could enhance their earnings, such as education or starting businesses. This loss of potential consumer spending can create a sluggish economy as businesses see reduced sales, which can further exacerbate cycles of inequality and limited economic growth.

In contrast, the other choices may suggest positive outcomes that typically do not align with the implications of reduced economic mobility. Increased savings among the wealthy, while potentially true, does not lead to dynamic economic growth, and greater access to education and increased job creation would generally be associated with improving economic mobility, not reducing it. Thus, the central effect of wealth inequality as related to reduced economic mobility manifests through a contraction in overall economic activity, marked notably by lower spending.