Income Inequality Quiz

What does the Gini coefficient measure?

• Economic growth rate

• Income inequality

• Poverty rate

• Gross domestic product (GDP)

Which of the following is NOT a measure of income distribution?

• Gini coefficient

• Lorenz curve

• Poverty line

• Wealth equality

What does the Lorenz curve illustrate?

• The distribution of wealth in a society

• The relationship between GDP and income inequality

• The relationship between poverty and economic growth

• The degree of income inequality in a population

The Lorenz curve lying closer to the line of perfect equality indicates (a)   .

• Higher income inequality
• Lower income inequality
• Equal distribution of income
• No income inequality

Which of the following is a consequence of high income inequality?

• Lower crime rates

• Higher social mobility

• Increased poverty rates

• Greater access to education

What is the poverty line?

• The maximum income level in a society

• The income level at which individuals are considered poor

• The minimum wage set by the government

• The average income of the top 1% of earners

What does it mean if a country has a high Gini coefficient?

• Low income inequality

• High income inequality

• Equal income distribution

• No income distribution

How does wealth differ from income?

• Wealth is a flow of money, while income is a stock of assets

• Wealth is a stock of assets, while income is a flow of money

• Wealth includes only tangible assets, while income includes only monetary income

• Wealth is measured annually, while income is measured over a lifetime

A common method used to measure absolute poverty is (a)  

• Lorenz curve
• Gini coefficient
• Poverty line
• Human Development Index (HDI)

Absolute poverty is often measured by considering individuals or households who live on less than:

• 50% of the median income in the country

• $1.50 per day

• 20% of the average income in the country

• The top 10% of the income distribution.