Corporate Social Responsibility Practice Test 2025 – Complete Exam Prep

Businesses can effectively address income inequality through Corporate Social Responsibility by implementing fair wage practices and supporting education. Fair wage practices ensure that employees receive a living wage that reflects the cost of living and value of their work, helping to narrow the income gap within a company and in the wider community. Additionally, supporting education through initiatives such as scholarships, training programs, and partnerships with educational institutions can empower individuals to improve their skills and gain access to better job opportunities. This holistic approach not only benefits employees but also contributes to a more equitable society, fostering loyalty, engagement, and a positive corporate reputation.

Other options do not align with the principles of CSR aimed at reducing income inequality. For example, increasing executive compensation may exacerbate income disparities rather than alleviate them. Reducing employee benefits could lead to greater financial strain on lower-income workers, further widening the inequality gap. Focusing solely on profit maximization typically overlooks the social and ethical responsibilities businesses have towards their stakeholders and can lead to neglecting broader societal issues such as income inequality.