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Total Categories: 7
In economics, what does the concept of income distribution primarily refer to?
Answer: True
In economics, income distribution refers to how a nation's total Gross Domestic Product (GDP) is divided among its population. This concept is a central concern for economic theory and policy, as the way income is distributed significantly impacts economic inequality within a country.
The Lorenz curve serves as a graphical representation of income distribution within a society.
Answer: True
The Lorenz curve is a graphical representation used to depict the distribution of income within a society. It is closely linked to measures of income inequality, such as the Gini coefficient.
A Gini coefficient value of 0 signifies perfect income equality, where all individuals possess the same income.
Answer: True
The Gini coefficient is a statistical measure used to represent the income or wealth distribution among a nation's residents. A value of 0 indicates perfect equality, meaning everyone has the same income, while a value of 1 signifies perfect inequality, where one person holds all the income.
The Gini coefficient is a statistical measure used to represent the income or wealth distribution among a nation's residents.
Answer: True
The Gini coefficient is a statistical measure used to represent the income or wealth distribution among a nation's residents. A value of 0 indicates perfect equality, meaning everyone has the same income, while a value of 1 signifies perfect inequality, where one person holds all the income.
Income inequality measures the spread of incomes, while poverty measures the absolute lack of resources for basic needs.
Answer: True
Income inequality refers to the uneven distribution of income among individuals or households within an economy, focusing on the spread of incomes. Poverty, on the other hand, relates to the state of lacking sufficient income or resources to meet basic needs. While related, they are distinct concepts, with inequality measuring the gap between incomes and poverty measuring the absolute level of deprivation.
In economics, what does the concept of income distribution primarily refer to?
Answer: How a nation's total Gross Domestic Product (GDP) is divided among its population.
In economics, income distribution refers to how a nation's total Gross Domestic Product (GDP) is divided among its population. This concept is a central concern for economic theory and policy, as the way income is distributed significantly impacts economic inequality within a country.
What graphical tool is commonly used to illustrate income distribution within a society and is closely linked to measures of inequality?
Answer: The Lorenz Curve.
The Lorenz curve is a graphical representation used to depict the distribution of income within a society. It is closely linked to measures of income inequality, such as the Gini coefficient.
According to the Gini coefficient, what does a value of 0 represent?
Answer: Perfect income equality, where everyone has the same income.
The Gini coefficient is a statistical measure used to represent the income or wealth distribution among a nation's residents. A value of 0 indicates perfect equality, meaning everyone has the same income, while a value of 1 signifies perfect inequality, where one person holds all the income.
Quintile and decile ratios are methods used to analyze income distribution by:
Answer: Dividing the population into equal segments (fifths or tenths) and comparing income shares.
Quintile and decile ratios are methods used to analyze income distribution by dividing the population into equal segments—fifths (quintiles) or tenths (deciles)—and comparing the share of income received by each segment. This comparison highlights disparities between different income groups.
Which statement best describes the difference between income inequality and poverty?
Answer: Inequality measures the spread of incomes, while poverty measures the absolute lack of resources for basic needs.
Income inequality refers to the uneven distribution of income among individuals or households within an economy, focusing on the spread of incomes. Poverty, on the other hand, relates to the state of lacking sufficient income or resources to meet basic needs. While related, they are distinct concepts, with inequality measuring the gap between incomes and poverty measuring the absolute level of deprivation.
Classical economists primarily focused on the distribution of income among factors of production, whereas modern economists tend to concentrate more on distribution among individuals and households.
Answer: True
Classical economists like Adam Smith, Thomas Malthus, and David Ricardo primarily focused on the distribution of income among the factors of production: land, labor, and capital. In contrast, modern economists tend to concentrate more on how income is distributed among individuals and households, often examining the relationship between income inequality and economic growth.
According to neoclassical theory, factor prices, such as wages and interest rates, are derived from the equilibrium of supply and demand in their respective markets.
Answer: True
The neoclassical theory of distribution posits that national income is determined by factor prices, which are the payments made to each factor of production (wages for labor, rent for land, interest for capital, and profit for entrepreneurship). These factor prices are, in turn, derived from the equilibrium of supply and demand in their respective markets and are considered equal to the marginal productivity of those factors.
The Kuznets curve theory posits that income inequality tends to increase during the early stages of economic development as a country industrializes, before eventually decreasing at higher income levels.
Answer: True
The Kuznets curve theory, named after economist Simon Kuznets, suggests that income inequality tends to increase during the early stages of economic development as a country industrializes. However, it predicts that inequality will eventually decrease once a certain average income level is reached. This theory posits a curvilinear relationship where inequality rises and then falls with development.
The Kuznets curve theory posits that inequality will eventually decrease once a certain average income level is reached.
Answer: True
The Kuznets curve theory, named after economist Simon Kuznets, suggests that income inequality tends to increase during the early stages of economic development as a country industrializes. However, it predicts that inequality will eventually decrease once a certain average income level is reached. This theory posits a curvilinear relationship where inequality rises and then falls with development.
Milanovic's 'mother of all inequality disputes' concerns whether inter-country income inequality has increased or decreased since 1980, depending on data weighting.
Answer: True
Milanovic's 'mother of all inequality disputes' refers to the debate surrounding whether inter-country income inequality has increased or decreased since 1980. The core of the dispute lies in whether countries' GDP per capita incomes are weighted by population; when unweighted, inequality increases, but when weighted by population, it decreases, largely due to the significant income growth in populous countries like China and India.
The main challenge in modeling income distribution as a stochastic process lies in the complexity and interaction of numerous, varied, and fluctuating determining forces.
Answer: True
The main challenge in modeling income distribution as a stochastic process lies in the complexity and interaction of numerous forces that determine it. These forces are varied, constantly interacting, and fluctuating, making it difficult to capture their dynamics in a simple, realistic theoretical model.
Which statement accurately contrasts the focus of classical and modern economists regarding income distribution?
Answer: Classical economists focused on factors of production (land, labor, capital), while modern economists tend to focus more on individuals/households.
Classical economists like Adam Smith, Thomas Malthus, and David Ricardo primarily focused on the distribution of income among the factors of production: land, labor, and capital. In contrast, modern economists tend to concentrate more on how income is distributed among individuals and households, often examining the relationship between income inequality and economic growth.
The neoclassical theory of distribution posits that national income is primarily determined by:
Answer: The equilibrium of supply and demand for factors of production, influencing factor prices.
The neoclassical theory of distribution posits that national income is determined by factor prices, which are the payments made to each factor of production (wages for labor, rent for land, interest for capital, and profit for entrepreneurship). These factor prices are, in turn, derived from the equilibrium of supply and demand in their respective markets and are considered equal to the marginal productivity of those factors.
The Kuznets curve theory suggests that during the early stages of economic development, income inequality tends to:
Answer: Increase.
The Kuznets curve theory, named after economist Simon Kuznets, suggests that income inequality tends to increase during the early stages of economic development as a country industrializes. However, it predicts that inequality will eventually decrease once a certain average income level is reached. This theory posits a curvilinear relationship where inequality rises and then falls with development.
The debate surrounding the trend of inter-country income inequality since 1980 primarily hinges on:
Answer: Whether countries' GDP per capita incomes are weighted by population or not.
Historically, inter-country income inequality has shown a significant increase, with the Gini coefficient more than doubling between 1820 and the 1980s. However, there is scholarly disagreement on whether this inequality has continued to increase, remained stable, or decreased since 1980, partly due to differing methodologies, such as whether countries' GDP per capita incomes are weighted by population.
Champernowne's model conceptualizes the development of income distribution over time as a(n):
Answer: Stochastic process.
Champernowne's model treats the development of income distribution over time as a stochastic process. It assumes income scales are divided into enumerable ranges with uniform proportionate distribution, where an individual's income in one year can depend on the previous year's income and a chance of progress, with a constant number of income receivers.
Measuring income inequality presents significant challenges due to the divergence between macroeconomic national accounts and microeconomic inequality studies, and the difficulty in assessing redistribution impacts without comprehensive pre- and post-tax data.
Answer: True
Measuring income inequality faces limitations, including a significant gap between macroeconomic national accounts and the microeconomic focus of inequality studies. It is also challenging to accurately assess the impact of government redistribution efforts without comprehensive data comparing pretax income to post-tax income. Additionally, understanding how major changes in women's labor force participation affect long-term income concentration remains complex.
The World Bank tracks consumption inequality for more countries than it tracks income inequality.
Answer: True
The World Bank tracks inequality data for 118 countries based on consumption inequality and for 68 countries based on income inequality. This highlights a broader dataset available for consumption-based measures.
The World Top Income Database is significant for providing historical data on income distribution, particularly focusing on the income levels of the top earners over extended periods.
Answer: True
The World Top Income Database, associated with economists like Anthony Atkinson and Thomas Piketty, is significant because it provides data on income distribution, particularly focusing on the top earners, over extended historical periods. This resource is crucial for analyzing long-term trends in wealth concentration.
A significant challenge in measuring income inequality, as mentioned in the source, is:
Answer: The difficulty in accurately assessing the impact of government redistribution efforts without comprehensive pre-tax and post-tax data.
Measuring income inequality faces limitations, including a significant gap between macroeconomic national accounts and the microeconomic focus of inequality studies. It is also challenging to accurately assess the impact of government redistribution efforts without comprehensive data comparing pretax income to post-tax income. Additionally, understanding how major changes in women's labor force participation affect long-term income concentration remains complex.
Thomas Piketty's influential book, *Capital in the Twenty-First Century*, is noted for:
Answer: Its systematic collection and review of historical data on income levels.
French economist Thomas Piketty's 2013 book, *Capital in the Twenty-First Century*, is noted for its systematic collection and review of historical data on income levels. His work has significantly contributed to the understanding and discussion of income distribution and inequality trends.
Which of the following organizations is mentioned as being involved in measuring income inequality internationally?
Answer: The United Nations (UN).
Several organizations measure income inequality internationally, including the United Nations (UN), the U.S. Central Intelligence Agency (CIA), and the World Bank. These organizations often use metrics like the Gini coefficient or Gini index to quantify these disparities.
According to World Bank data, which type of inequality is tracked for a larger number of countries?
Answer: Consumption inequality.
The World Bank tracks inequality data for 118 countries based on consumption inequality and for 68 countries based on income inequality. This highlights a broader dataset available for consumption-based measures.
Research indicates that labor unions generally tend to reduce income inequality.
Answer: True
Research indicates that labor unions tend to reduce income inequality in both private and public sectors. Studies have shown that unionization has a more pronounced effect on redressing income inequality in public sectors compared to private sectors, for both male and female workers in countries like America and Canada.
Unionization has been shown to have a more pronounced effect on redressing income inequality in public sectors compared to private sectors.
Answer: True
Research indicates that labor unions tend to reduce income inequality in both private and public sectors. Studies have shown that unionization has a more pronounced effect on redressing income inequality in public sectors compared to private sectors, for both male and female workers in countries like America and Canada.
Differences in accumulated work experience and employment breaks for family reasons are factors that contribute to the gender wage gap.
Answer: True
The gender wage gap is influenced by several factors, including differences in educational choices, preferred job sectors, accumulated work experience, the number of hours worked, and employment breaks for family reasons. Additionally, men often enter higher-paying and higher-risk jobs. While these factors explain a significant portion of the gap, remaining differences are attributed to factors like women's lower willingness or ability to negotiate salaries and potential sexual discrimination.
The phrase 'socialism for the rich and capitalism for the poor' suggests a system where the wealthy benefit from socialized support, such as bailouts or subsidies, while simultaneously operating within a capitalist framework that places the burden of market risks and failures on the less affluent.
Answer: True
The phrase 'socialism for the rich and capitalism for the poor' suggests a system where the wealthy benefit from socialized support, such as bailouts or subsidies, while simultaneously operating within a capitalist framework that places the burden of market risks and failures on the less affluent. This dynamic can exacerbate income inequality.
Which of the following is identified as a factor contributing to income inequality?
Answer: Technological advancements like automation.
Income inequality is influenced by a wide array of factors, including labor economics, tax policies, broader economic policies, labor union activities, monetary and fiscal policies, the dynamics of the labor market, individual worker abilities, technological advancements like automation, education levels, globalization, gender bias, racism, and cultural norms.
According to research cited in the source, what is the general impact of labor unions on income inequality?
Answer: They tend to reduce income inequality.
Research indicates that labor unions tend to reduce income inequality in both private and public sectors. Studies have shown that unionization has a more pronounced effect on redressing income inequality in public sectors compared to private sectors, for both male and female workers in countries like America and Canada.
Which factor is identified as contributing to the gender wage gap?
Answer: Men's higher willingness to negotiate salaries.
The gender wage gap is influenced by several factors, including differences in educational choices, preferred job sectors, accumulated work experience, the number of hours worked, and employment breaks for family reasons. Additionally, men often enter higher-paying and higher-risk jobs. While these factors explain a significant portion of the gap, remaining differences are attributed to factors like women's lower willingness or ability to negotiate salaries and potential sexual discrimination.
Which of the following is cited as a factor contributing to the high level of income inequality in the U.S.?
Answer: Lower effective tax rates on high incomes.
The high level of income inequality in the U.S. is attributed to several factors, including rising executive compensation relative to average worker pay, increased financialization, greater industry concentration, declining unionization rates, lower effective tax rates on high incomes, and technological changes that disproportionately reward higher educational attainment.
The phrase 'socialism for the rich and capitalism for the poor' implies a system where:
Answer: The wealthy receive socialized support while the less affluent bear market risks.
The phrase 'socialism for the rich and capitalism for the poor' suggests a system where the wealthy benefit from socialized support, such as bailouts or subsidies, while simultaneously operating within a capitalist framework that places the burden of market risks and failures on the less affluent. This dynamic can exacerbate income inequality.
An OECD report in May 2011 indicated that the gap between the rich and the poor within OECD countries had reached its highest level in over 30 years.
Answer: True
An OECD report from May 2011 highlighted that the gap between the rich and the poor within OECD countries had reached its highest level in over 30 years. The report urged governments to take swift action to address this growing inequality.
High income inequality is associated with slower GDP growth and reduced income mobility.
Answer: True
High income inequality can lead to several negative consequences, including slower GDP growth, reduced income mobility, higher poverty rates, an increased reliance on household debt which heightens the risk of financial crises, and greater political polarization within a society.
Recent global trends indicate that income inequality has been increasing in many regions.
Answer: True
Recent trends indicate that income inequality has been increasing in many regions globally. This rise is often linked to factors such as globalization and significant shifts within the global economy.
The World Gini index measures income inequality on a global scale, and its value was reported as 0.52 in 2016.
Answer: True
The World Gini index measures income inequality on a global scale, with values ranging from 0 (perfect equality) to 1 (perfect inequality). As of 2016, the world Gini index was reported to be 0.52, indicating a significant level of global income inequality.
In the context of income mobility, what does a situation of *low* mobility signify?
Answer: The rich always remain rich and the poor always remain poor.
Income mobility refers to the ability of individuals to change their economic standing or move within the hierarchy of earning power over their lifetime. The extremes of income mobility are: 1) a situation where the rich always remain rich and the poor always remain poor, indicating low mobility and a permanent inequality problem; and 2) a situation where individuals can easily shift between income classes, suggesting 'fluid' and temporary inequality.
Income mobility is typically measured by examining the association between:
Answer: Parents' socioeconomic standing and their adult children's socioeconomic standing.
Income mobility is typically measured by examining the association between parents' socioeconomic standing and their adult children's socioeconomic standing. A higher association indicates less mobility, suggesting that a person's economic status is strongly determined by their parents'. This association is analyzed using measures like occupational status, class mobility, earnings mobility, and total family income mobility.
In global comparisons, income inequality is typically examined in two main ways:
Answer: Intra-country and inter-country inequality.
Income inequality is typically examined in two ways: intra-country inequality, which measures disparities within a single nation, and inter-country inequality, which compares income disparities between different countries. Both perspectives are crucial for understanding the global landscape of economic inequality.
According to an OECD report in May 2011, the gap between the rich and the poor in OECD countries had:
Answer: Reached its highest level in over 30 years.
An OECD report from May 2011 highlighted that the gap between the rich and the poor within OECD countries had reached its highest level in over 30 years. The report urged governments to take swift action to address this growing inequality.
Hans Rosling's TED presentation on income distribution included visualizations of:
Answer: Income distribution across nations and related factors like child survival rates.
In his TED presentation, Hans Rosling visualized the distribution and changes in income across various nations over several decades. He also presented related factors such as child survival rates and fertility rates, offering a comprehensive view of global development and inequality trends.
Which of the following is identified as a potential negative consequence of high income inequality?
Answer: Greater political polarization.
High income inequality can lead to several negative consequences, including slower GDP growth, reduced income mobility, higher poverty rates, an increased reliance on household debt which heightens the risk of financial crises, and greater political polarization within a society.
Recent global trends indicate that income inequality has been:
Answer: Increasing in many regions.
Recent trends indicate that income inequality has been increasing in many regions globally. This rise is often linked to factors such as globalization and significant shifts within the global economy.
The World Gini index measures income inequality on a global scale. What was its reported value in 2016?
Answer: 0.52.
The World Gini index measures income inequality on a global scale, with values ranging from 0 (perfect equality) to 1 (perfect inequality). As of 2016, the world Gini index was reported to be 0.52, indicating a significant level of global income inequality.
Progressive taxation requires individuals with higher incomes to pay a larger percentage of their earnings in taxes compared to lower earners.
Answer: True
Progressive taxation reduces income inequality by requiring individuals with higher incomes to pay a larger percentage of their earnings in taxes, while those with lower incomes pay a smaller percentage. This system allows lower-income individuals to retain a greater portion of their earnings. The collected tax revenue is then used to fund public services, ensuring that all citizens benefit from societal resources, but the wealthy contribute proportionally more.
Progressive taxation is justified by the principle that a fixed amount of money has a greater economic impact on a poor individual than on a wealthy one.
Answer: True
Progressive taxation is justified by the principle that a fixed amount of money has a greater economic impact on a poor individual than on a wealthy one. By taxing higher incomes at higher rates, the system ensures that the wealthy contribute more, allowing the poor to retain a larger percentage of their income, thereby reducing overall inequality.
Housing subsidies are primarily designed to assist lower-income families in securing adequate housing.
Answer: True
Housing subsidies are designed to assist lower-income families in securing adequate housing, as the cost of rent and upkeep often represents a substantial portion of their spending. These subsidies aim to alleviate financial burdens related to housing.
Welfare and unemployment benefits provide direct financial assistance, allowing recipients the freedom to decide how to use the funds, assuming rational decision-making.
Answer: True
Welfare and unemployment benefits provide direct financial assistance to individuals with little or no income. This support allows recipients the freedom to decide how to use the funds, assuming they make rational decisions in their best interest, thereby offering a crucial safety net.
International cooperation is considered vital for addressing global income inequality, particularly for establishing global standards in areas like labor rights and tax policies.
Answer: True
International cooperation is vital for tackling income inequality by establishing global standards for labor rights, tax policies, and corporate governance. This collaborative approach helps prevent a 'race to the bottom' concerning wages and working conditions across borders.
Which of the following is NOT listed as a key government policy aimed at influencing income distribution?
Answer: Central bank interest rate adjustments.
Government policies designed to influence income distribution include progressive taxation, where higher earners pay a larger percentage of their income in taxes; public spending on services like education and healthcare to benefit lower-income groups; and wage policies such as minimum wage laws and support for collective bargaining to improve earnings for low- and middle-income workers. Central bank interest rate adjustments are primarily monetary policy tools.
Progressive taxation aims to reduce income inequality by:
Answer: Requiring higher earners to pay a larger percentage of their income in taxes.
Progressive taxation reduces income inequality by requiring individuals with higher incomes to pay a larger percentage of their earnings in taxes, while those with lower incomes pay a smaller percentage. This system allows lower-income individuals to retain a greater portion of their earnings. The collected tax revenue is then used to fund public services, ensuring that all citizens benefit from societal resources, but the wealthy contribute proportionally more.
The principle justifying progressive taxation suggests that a fixed amount of money has:
Answer: A greater economic impact on a poor individual than on a wealthy one.
Progressive taxation is justified by the principle that a fixed amount of money has a greater economic impact on a poor individual than on a wealthy one. By taxing higher incomes at higher rates, the system ensures that the wealthy contribute more, allowing the poor to retain a larger percentage of their income, thereby reducing overall inequality.
Housing subsidies are primarily designed to assist which group with securing adequate housing?
Answer: Lower-income families facing high rent and upkeep costs.
Housing subsidies are designed to assist lower-income families in securing adequate housing, as the cost of rent and upkeep often represents a substantial portion of their spending. These subsidies aim to alleviate financial burdens related to housing.
Welfare and unemployment benefits provide direct financial assistance, allowing recipients to:
Answer: Decide how to use the funds, assuming rational decision-making.
Welfare and unemployment benefits provide direct financial assistance to individuals with little or no income. This support allows recipients the freedom to decide how to use the funds, assuming they make rational decisions in their best interest, thereby offering a crucial safety net.
International cooperation is considered vital for addressing income inequality primarily because it helps to:
Answer: Establish global standards for labor rights and tax policies.
International cooperation is vital for tackling income inequality by establishing global standards for labor rights, tax policies, and corporate governance. This collaborative approach helps prevent a 'race to the bottom' concerning wages and working conditions across borders.
A 25-year study by Brandeis University found that the wealth gap between Caucasian and African-American families in the United States nearly tripled during the study period.
Answer: True
A 25-year study by Brandeis University's Institute on Assets and Social Policy found substantial wealth disparities between Caucasian and African-American families in the United States. The study indicated that the wealth gap nearly tripled during the study period, with contributing factors including years of home ownership, household income, education, and familial financial support or inheritance.
Larry Summers estimated in 2007 that the lower 80% of families in the U.S. were receiving significantly less income annually compared to the 1979 distribution.
Answer: True
In 2007, Larry Summers estimated that the lower 80% of families in the U.S. were receiving $664 billion less income annually compared to what they would have received under the 1979 income distribution. This equates to approximately $7,000 less per family, potentially contributing to increased debt burdens and slower economic growth.
Japan's post-tax Gini coefficient is reported as 0.32, indicating a moderate level of income inequality compared to many other OECD countries.
Answer: True
For Japan, the post-tax Gini coefficient is reported as 0.32. The unemployment rate is 2.6%, GDP per capita is $40,850, and the poverty rate is 15.7%. These figures indicate a moderate level of income inequality compared to many other OECD countries, despite significant economic hardship for some segments of the population.
Around 2011, India's estimated Gini coefficient ranged from 0.33 to 0.36, indicating moderate to high income inequality.
Answer: True
Around 2011, India's estimated Gini coefficient ranged from 0.33 to 0.36, indicating moderate to high income inequality. The unemployment rate was approximately 9%, and GDP per capita was about USD 1,500. Over 20% of the population lived below the poverty line. The government implemented measures like the MGNREGA for rural employment, subsidized food programs (PDS), and financial inclusion initiatives to address economic disparity.
In 2016, Thailand was ranked by Oxfam as one of the world's least unequal nations.
Answer: False
In 2016, Thailand was ranked as the world's third most unequal nation by Oxfam, with a widening gap between rich and poor. Studies showed extreme concentration of land ownership and bank deposits among the wealthiest. The government aimed to narrow the income disparity gap to 15 times by 2036, up from 20 times in 2018, while also working to increase per capita income.
As of 2019, the wealthiest 10% of American households controlled nearly 75% of household net worth.
Answer: True
As of 2019, the wealthiest 10% of American households controlled nearly 75% of household net worth. The post-tax Gini coefficient was 0.39, the unemployment rate was 4.4%, GDP per capita was $53,632, and the poverty rate was 11.1%. These figures place the U.S. among the most unequal developed nations.
Historically, the UK experienced a significant increase in income inequality during the 1980s.
Answer: True
The United Kingdom ranked 13th globally in income inequality in 2019, having made efforts to reduce its wide gap between rich and poor. Historically, the UK experienced a significant increase in inequality during the 1980s, with stagnant incomes for most while the highest deciles saw gains. The 1990s and 2000s saw more even growth, stabilizing inequality levels.
Close connections between Russian oligarchs and the government are cited as a primary cause of Russia's significant income gap.
Answer: True
The text attributes Russia's high income inequality primarily to the close relationships between government officials and oligarchs, which allows these oligarchs to secure advantageous business deals and accumulate wealth disproportionately.
South Africa's dual economy contributes to racial income disparities, with Black South Africans earning significantly less than White South Africans on average.
Answer: True
South Africa is noted for its high income inequality, with a post-tax Gini coefficient of 0.62. The unemployment rate is significantly high at 27.3%, GDP per capita is $12,287, and the poverty rate is 26.6%. The country is described as having a dual economy, contributing to racial income disparities, where Black South Africans earn, on average, three times less than White South Africans.
From 2004 to 2014, income inequality in Brazil reportedly increased significantly.
Answer: False
From 2004 to 2014, income inequality in Brazil reportedly declined, with the Gini coefficient for household per capita income decreasing from 0.54 to 0.49. This reduction was attributed to economic growth boosting the incomes of the poor, the implementation of social policies like the Bolsa Família program, progressive taxation, demographic shifts, and labor market segmentation.
China's Gini coefficient in 2020 was reported as 0.371, primarily driven by the income gap between rural and urban households.
Answer: True
China's Gini coefficient was reported as 0.371 in 2020, having risen significantly since 1981. The main driver of China's high Gini coefficient is the substantial income gap between rural and urban households, exacerbated by constraints on migration that limit rural residents' ability to seek higher incomes in urban areas.
Nordic countries, such as Denmark, Sweden, and Norway, are renowned for low income distribution compared to the rest of the world.
Answer: True
Nordic countries, including Denmark, Sweden, and Norway, are renowned for relatively low income distribution compared to the rest of the world. This is attributed to factors such as progressive taxation, robust social welfare systems, strong labor market institutions, and a culture of social cohesion. Despite temporary increases in inequality, these nations have shown resilience in maintaining stable, low income inequality.
In the Czech Republic, 66% of employees earn less than the average wage.
Answer: True
For Czechia, it is noted that 66% of employees earn less than the average wage. The unemployment rate is projected to remain stable at 2.6%, and the minimum wage is among the lowest in the EU. These factors contribute to the country's income distribution landscape.
A Brandeis University study over 25 years revealed that the wealth gap between Caucasian and African-American families in the U.S. had:
Answer: Nearly tripled.
A 25-year study by Brandeis University's Institute on Assets and Social Policy found substantial wealth disparities between Caucasian and African-American families in the United States. The study indicated that the wealth gap nearly tripled during the study period, with contributing factors including years of home ownership, household income, education, and familial financial support or inheritance.
In 2007, Larry Summers estimated that the lower 80% of families in the U.S. were receiving how much less income annually compared to the 1979 distribution?
Answer: Both B and C are correct.
In 2007, Larry Summers estimated that the lower 80% of families in the U.S. were receiving $664 billion less income annually compared to what they would have received under the 1979 income distribution. This equates to approximately $7,000 less per family, potentially contributing to increased debt burdens and slower economic growth.
Based on the provided data, which statement about Japan's economic indicators is accurate?
Answer: Japan's poverty rate is reported as 15.7% with a GDP per capita of $40,850.
For Japan, the post-tax Gini coefficient is reported as 0.32. The unemployment rate is 2.6%, GDP per capita is $40,850, and the poverty rate is 15.7%. These figures indicate a moderate level of income inequality compared to many other OECD countries, despite significant economic hardship for some segments of the population.
Around 2011, India's income distribution was characterized by:
Answer: Moderate to high income inequality (Gini 0.33-0.36) and over 20% poverty.
Around 2011, India's estimated Gini coefficient ranged from 0.33 to 0.36, indicating moderate to high income inequality. The unemployment rate was approximately 9%, and GDP per capita was about USD 1,500. Over 20% of the population lived below the poverty line. The government implemented measures like the MGNREGA for rural employment, subsidized food programs (PDS), and financial inclusion initiatives to address economic disparity.
In 2016, Thailand was described by Oxfam as:
Answer: The world's third most unequal nation.
In 2016, Thailand was ranked as the world's third most unequal nation by Oxfam, with a widening gap between rich and poor. Studies showed extreme concentration of land ownership and bank deposits among the wealthiest. The government aimed to narrow the income disparity gap to 15 times by 2036, up from 20 times in 2018, while also working to increase per capita income.
As of 2019, which statistic best characterizes income distribution in the United States?
Answer: The wealthiest 10% controlled nearly 75% of household net worth, with a post-tax Gini coefficient of 0.39.
As of 2019, the wealthiest 10% of American households controlled nearly 75% of household net worth. The post-tax Gini coefficient was 0.39, the unemployment rate was 4.4%, GDP per capita was $53,632, and the poverty rate was 11.1%. These figures place the U.S. among the most unequal developed nations.
The text suggests that a primary cause for Russia's significant income gap is:
Answer: Close connections between oligarchs and the government facilitating lucrative deals.
The text attributes Russia's high income inequality primarily to the close relationships between government officials and oligarchs, which allows these oligarchs to secure advantageous business deals and accumulate wealth disproportionately.
South Africa is noted for its high income inequality, characterized by a post-tax Gini coefficient of:
Answer: 0.62.
South Africa is noted for its high income inequality, with a post-tax Gini coefficient of 0.62. The unemployment rate is significantly high at 27.3%, GDP per capita is $12,287, and the poverty rate is 26.6%. The country is described as having a dual economy, contributing to racial income disparities, where Black South Africans earn, on average, three times less than White South Africans.
The primary driver of China's high Gini coefficient is identified as:
Answer: The income gap between urban and rural households.
China's Gini coefficient was reported as 0.371 in 2020, having risen significantly since 1981. The main driver of China's high Gini coefficient is the substantial income gap between rural and urban households, exacerbated by constraints on migration that limit rural residents' ability to seek higher incomes in urban areas.