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Economic Inequality

Description: This quiz covers the topic of economic inequality, including its causes, consequences, and potential solutions.
Number of Questions: 14
Created by:
Tags: economics economic inequality distribution of income wealth inequality
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What is the most common measure of economic inequality?

  1. The Gini coefficient

  2. The Lorenz curve

  3. The Atkinson index

  4. The Theil index

Show answer
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, and is the most commonly used measure of inequality.

Which country has the highest level of economic inequality?

  1. United States

  2. China

  3. India

  4. Brazil

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Correct Option: A
Explanation:

The United States has the highest level of economic inequality among developed countries, with a Gini coefficient of 0.41.

What is the main cause of economic inequality?

  1. Differences in education and skills

  2. Differences in inheritance

  3. Discrimination

  4. Government policies

Show answer
Correct Option:
Explanation:

Economic inequality is caused by a combination of factors, including differences in education and skills, differences in inheritance, discrimination, and government policies.

What are the consequences of economic inequality?

  1. Increased poverty and social unrest

  2. Lower economic growth

  3. Reduced social mobility

  4. All of the above

Show answer
Correct Option: D
Explanation:

Economic inequality can lead to increased poverty and social unrest, lower economic growth, and reduced social mobility.

What are some potential solutions to economic inequality?

  1. Progressive taxation

  2. Investment in education and job training

  3. Minimum wage laws

  4. All of the above

Show answer
Correct Option: D
Explanation:

Potential solutions to economic inequality include progressive taxation, investment in education and job training, minimum wage laws, and other policies that aim to reduce income and wealth disparities.

What is the relationship between economic inequality and economic growth?

  1. Economic inequality can lead to lower economic growth.

  2. Economic inequality can lead to higher economic growth.

  3. There is no relationship between economic inequality and economic growth.

  4. The relationship between economic inequality and economic growth is complex and depends on a variety of factors.

Show answer
Correct Option: D
Explanation:

The relationship between economic inequality and economic growth is complex and depends on a variety of factors, including the level of inequality, the type of inequality, and the policies in place to address inequality.

What is the Kuznets curve?

  1. A graph that shows the relationship between economic inequality and economic growth.

  2. A graph that shows the relationship between economic inequality and social mobility.

  3. A graph that shows the relationship between economic inequality and poverty.

  4. A graph that shows the relationship between economic inequality and government spending.

Show answer
Correct Option: A
Explanation:

The Kuznets curve is a graph that shows the relationship between economic inequality and economic growth. It typically shows that inequality increases in the early stages of economic development, but then decreases as countries become more developed.

What is the Atkinson index?

  1. A measure of economic inequality that takes into account the distribution of income across the entire population.

  2. A measure of economic inequality that takes into account the distribution of income among the poorest 20% of the population.

  3. A measure of economic inequality that takes into account the distribution of income among the richest 20% of the population.

  4. A measure of economic inequality that takes into account the distribution of income among the middle 60% of the population.

Show answer
Correct Option: A
Explanation:

The Atkinson index is a measure of economic inequality that takes into account the distribution of income across the entire population. It is calculated by taking the square root of the sum of the squared differences between each individual's income and the mean income.

What is the Theil index?

  1. A measure of economic inequality that takes into account the distribution of income across the entire population.

  2. A measure of economic inequality that takes into account the distribution of income among the poorest 20% of the population.

  3. A measure of economic inequality that takes into account the distribution of income among the richest 20% of the population.

  4. A measure of economic inequality that takes into account the distribution of income among the middle 60% of the population.

Show answer
Correct Option: A
Explanation:

The Theil index is a measure of economic inequality that takes into account the distribution of income across the entire population. It is calculated by taking the sum of the logarithms of each individual's income divided by the mean income.

What is the Palma ratio?

  1. A measure of economic inequality that takes into account the ratio of the income of the top 10% of earners to the income of the bottom 10% of earners.

  2. A measure of economic inequality that takes into account the ratio of the income of the top 20% of earners to the income of the bottom 20% of earners.

  3. A measure of economic inequality that takes into account the ratio of the income of the top 30% of earners to the income of the bottom 30% of earners.

  4. A measure of economic inequality that takes into account the ratio of the income of the top 40% of earners to the income of the bottom 40% of earners.

Show answer
Correct Option: A
Explanation:

The Palma ratio is a measure of economic inequality that takes into account the ratio of the income of the top 10% of earners to the income of the bottom 10% of earners. It is a measure of the extent to which income is concentrated among the highest earners.

What is the Piketty ratio?

  1. A measure of economic inequality that takes into account the ratio of the wealth of the top 1% of earners to the wealth of the bottom 50% of earners.

  2. A measure of economic inequality that takes into account the ratio of the wealth of the top 5% of earners to the wealth of the bottom 25% of earners.

  3. A measure of economic inequality that takes into account the ratio of the wealth of the top 10% of earners to the wealth of the bottom 10% of earners.

  4. A measure of economic inequality that takes into account the ratio of the wealth of the top 20% of earners to the wealth of the bottom 20% of earners.

Show answer
Correct Option: A
Explanation:

The Piketty ratio is a measure of economic inequality that takes into account the ratio of the wealth of the top 1% of earners to the wealth of the bottom 50% of earners. It is a measure of the extent to which wealth is concentrated among the highest earners.

What is the Gini coefficient?

  1. A measure of economic inequality that takes into account the distribution of income across the entire population.

  2. A measure of economic inequality that takes into account the distribution of income among the poorest 20% of the population.

  3. A measure of economic inequality that takes into account the distribution of income among the richest 20% of the population.

  4. A measure of economic inequality that takes into account the distribution of income among the middle 60% of the population.

Show answer
Correct Option: A
Explanation:

The Gini coefficient is a measure of economic inequality that takes into account the distribution of income across the entire population. It is calculated by taking the ratio of the area between the Lorenz curve and the line of perfect equality to the area below the line of perfect equality.

What is the Lorenz curve?

  1. A graph that shows the cumulative distribution of income.

  2. A graph that shows the distribution of income across the entire population.

  3. A graph that shows the distribution of income among the poorest 20% of the population.

  4. A graph that shows the distribution of income among the richest 20% of the population.

Show answer
Correct Option: A
Explanation:

The Lorenz curve is a graph that shows the cumulative distribution of income. It is a graphical representation of the distribution of income across the entire population.

What is the line of perfect equality?

  1. A line that shows the distribution of income if everyone had the same income.

  2. A line that shows the distribution of income if the richest 1% of earners had all of the income.

  3. A line that shows the distribution of income if the poorest 1% of earners had all of the income.

  4. A line that shows the distribution of income if the middle 60% of earners had all of the income.

Show answer
Correct Option: A
Explanation:

The line of perfect equality is a line that shows the distribution of income if everyone had the same income. It is a hypothetical line that represents the most equal distribution of income possible.

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