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Economic Inequality and Redistribution

Description: This quiz aims to evaluate your understanding of economic inequality and redistribution. It covers concepts such as the causes and consequences of inequality, the role of government policies in addressing inequality, and the trade-offs involved in redistribution.
Number of Questions: 15
Created by:
Tags: economics economic policymaking economic inequality redistribution
Attempted 0/15 Correct 0 Score 0

What is the most common measure of economic inequality?

  1. Gini coefficient

  2. Lorenz curve

  3. Palma ratio

  4. Atkinson index


Correct Option: A
Explanation:

The Gini coefficient is a measure of statistical dispersion intended to represent the income or wealth distribution of a nation's residents. It is most commonly used as a measure of inequality.

Which of the following is NOT a potential cause of economic inequality?

  1. Differences in education and skills

  2. Discrimination

  3. Inheritance

  4. Government policies


Correct Option: D
Explanation:

Government policies can be used to address economic inequality, but they are not a cause of inequality.

What is the main argument in favor of government intervention to reduce economic inequality?

  1. It promotes social mobility.

  2. It increases economic growth.

  3. It reduces social unrest.

  4. It improves the overall well-being of society.


Correct Option: D
Explanation:

The main argument in favor of government intervention to reduce economic inequality is that it improves the overall well-being of society by reducing poverty, improving health outcomes, and increasing social mobility.

Which of the following is NOT a potential consequence of economic inequality?

  1. Increased social unrest

  2. Reduced economic growth

  3. Increased crime

  4. Improved health outcomes


Correct Option: D
Explanation:

Economic inequality can lead to a number of negative consequences, including increased social unrest, reduced economic growth, and increased crime. However, it is not typically associated with improved health outcomes.

What is the main trade-off involved in redistribution?

  1. Efficiency vs. equity

  2. Growth vs. stability

  3. Inflation vs. unemployment

  4. Public goods vs. private goods


Correct Option: A
Explanation:

The main trade-off involved in redistribution is between efficiency and equity. Redistribution can reduce inequality, but it can also reduce economic efficiency by discouraging work and investment.

Which of the following is NOT a common form of government intervention to reduce economic inequality?

  1. Progressive taxation

  2. Social welfare programs

  3. Minimum wage laws

  4. Affirmative action policies


Correct Option: D
Explanation:

Affirmative action policies are not typically used to reduce economic inequality. They are designed to address discrimination and promote equal opportunity.

What is the main challenge in designing effective redistribution policies?

  1. Identifying the optimal level of redistribution

  2. Overcoming political opposition

  3. Measuring the impact of redistribution policies

  4. Designing policies that are efficient and equitable


Correct Option: D
Explanation:

The main challenge in designing effective redistribution policies is designing policies that are both efficient and equitable. This is a difficult task, as there is often a trade-off between these two goals.

Which of the following is NOT a potential benefit of redistribution?

  1. Reduced poverty

  2. Improved health outcomes

  3. Increased social mobility

  4. Reduced economic growth


Correct Option: D
Explanation:

Redistribution can have a number of positive benefits, including reduced poverty, improved health outcomes, and increased social mobility. However, it can also lead to reduced economic growth in some cases.

What is the main argument against government intervention to reduce economic inequality?

  1. It is unfair to those who have worked hard to earn their wealth.

  2. It reduces economic growth.

  3. It creates a disincentive to work and invest.

  4. It is ineffective in reducing inequality.


Correct Option: C
Explanation:

The main argument against government intervention to reduce economic inequality is that it creates a disincentive to work and invest. This is because redistribution policies can reduce the rewards for working hard and taking risks.

Which of the following is NOT a potential consequence of government intervention to reduce economic inequality?

  1. Reduced poverty

  2. Improved health outcomes

  3. Increased social mobility

  4. Reduced economic growth


Correct Option: D
Explanation:

Government intervention to reduce economic inequality can have a number of positive consequences, including reduced poverty, improved health outcomes, and increased social mobility. However, it can also lead to reduced economic growth in some cases.

What is the main challenge in measuring economic inequality?

  1. Defining what constitutes income or wealth

  2. Collecting accurate data on income and wealth

  3. Adjusting for differences in the cost of living

  4. All of the above


Correct Option: D
Explanation:

There are a number of challenges involved in measuring economic inequality. These include defining what constitutes income or wealth, collecting accurate data on income and wealth, and adjusting for differences in the cost of living.

Which of the following is NOT a potential policy tool for reducing economic inequality?

  1. Progressive taxation

  2. Social welfare programs

  3. Minimum wage laws

  4. School vouchers


Correct Option: D
Explanation:

School vouchers are not typically used to reduce economic inequality. They are designed to improve the quality of education for students from low-income families.

What is the main goal of progressive taxation?

  1. To reduce economic inequality

  2. To raise revenue for government spending

  3. To promote economic growth

  4. To discourage consumption of certain goods and services


Correct Option: A
Explanation:

The main goal of progressive taxation is to reduce economic inequality by taxing higher-income earners at a higher rate than lower-income earners.

Which of the following is NOT a potential benefit of social welfare programs?

  1. Reduced poverty

  2. Improved health outcomes

  3. Increased social mobility

  4. Reduced economic growth


Correct Option: D
Explanation:

Social welfare programs can have a number of positive benefits, including reduced poverty, improved health outcomes, and increased social mobility. However, they can also lead to reduced economic growth in some cases.

What is the main goal of minimum wage laws?

  1. To reduce economic inequality

  2. To raise the standard of living for low-wage workers

  3. To promote economic growth

  4. To discourage the use of child labor


Correct Option: B
Explanation:

The main goal of minimum wage laws is to raise the standard of living for low-wage workers by ensuring that they are paid a living wage.

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