Poverty and Income Inequality

The Gini coefficient is _____________________ as income inequality _____________________.

• lower / increases

• lower / decreases

• higher / decreases

• unchanging / increases

The market system results in an _____________________ distribution of income because _____________________.

• equal / factors of production are usually equally distributed

• unequal / tax systems are sometimes too progressive

• equal / tax systems are sometimes regressive

• unequal / ownership of factors of production is usually unequally distributed

The further away the Lorenz curve of an economy from the line of perfect equality,

• the more unequal the distribution of income

• the more equal the distribution of income

• equality of income distribution at first improves and then worsens

• equality of income distribution at first worsens and then improves

Equitable income distribution relates to

• normative questions around what is a fair distribution of income

• normative questions of how to ensure everyone receives the same amount of income

• positive questions around what is a fair distribution of income

• positive questions around the current income distribution statistics

Income inequality refers to

• the degree of difference in ownership of wealth

• the degree of difference that workers receive in wages

• the degree of difference in the payments that households receive for resources

• the degree of difference in how profits are distributed to workers

Populations are divided into groups of ten, five and four _____________________, _____________________ and _____________________ respectively.

• quartiles / deciles / quintiles

• quintiles / deciles / quartiles

• quartiles / quintiles / deciles

• deciles / quintiles / quartiles

The diagonal line in a Lorenz curve represents

• perfect income inequality

• perfect income equality

• increasing income equality as you move up the curve

• decreasing income equality as you move up the curve

The Gini coefficient is derived from a Lorenz curve diagram by

• taking the sum of the area below with the area above the curve, and then dividing by the entire area under the diagonal

• taking the area above the curve and then dividing it by the sum of the entire area under the diagonal

• taking the entire area under the diagonal and then dividing it by the area above the curve

• taking the entire area under the diagonal and then dividing it by the area below the curve

If a Lorenz curve shifts closer to the diagonal in a Lorenz curve diagram then

• the distribution of income has become more unequal

• the distribution of income has become more equitable

• the distribution of income has become less equitable

• the distribution of income has become more equal

If a household lacks the income to meet basic needs, they are

• in absolute poverty

• in low-income poverty

• in relative poverty

• over the poverty line