Question

1) Which of the following is true about income inequality?

A) Inequality tends to be greatest in the poorest countries.

B) Inequality is not an issue for developed countries.

C) Inequality tends to get worse as a country develops.

D) Inequality tends to diminish as the population increases

2) Poverty is most likely to decrease when

A) Population increases regardless of what happens to economic growth.

B) GDP increases regardless of what happens to population growth.

C) Population growth exceeds economic growth.

D) Economic growth exceeds population growth.

3) Increased inequality in the distribution of income contributes to

A) The same percentage of income received by the highest and lowest quintiles of households

B) A smaller percentage of income received by the highest 20% of households

C) A greater percentage of income received by the highest 20% of households

D) A greater percentage of income received by the lowest 20% of households

4) The case for ignoring income inequality is primarily made on the grounds that such   

       inequality

1. Reduces transfer payments to the poor
2. Is necessary to create incentives to work, produce and invest
3. Depends on chance and thus cannot be corrected by government policies
4. Is due to education and training programs that distort income distribution

5)

The debate over income inequality is in large part based on the trade-off between                           

       equality and

1. Growth and efficiency
2. Unemployment
3. Inflation
4. Laissez-faire economics

Answer 1

1. Ans - a) Inequality tends to be greatest in the poorest countries.

Explanation:
It is because of the fact that in poor countries income,savings and reserves are less and investments are very low in rate therefore it makes the poor more poorer and the rich more richer which is the cause of inequality in income.

2. Ans - d) economic growth exceeds population growth

3. Ans - C) a greater percentage of income received by the highest 20% of households.

4. Ans - D) Is due to education and training programs that distort income distribution

5. Ans - A) Growth and efficiency

The debate over income distribution focuses on the trade-off between economic efficiency and equality.