Economics-14(Addressing income and wealth inquality)

Which of the following best defines “wealth”?

• The money earned from wages and salaries.

• The stock of assets that has been built up over time.

• The total amount of taxes paid to the government.

• The distribution of income in an economy.

What is the purpose of the “Gini coefficient”?

• To measure economic growth.

• To measure income inequality.

• To measure government spending.

• To measure unemployment rates.

True or False. (Wealth is earned at regular intervals, like wages and salaries.)

• True

• False

• I don't know

Answer explanation

(False - Wealth is a stock of assets built over time, not a regular income flow.)

What is the relationship between wealth and income?

• Wealth and income are identical.

• Income is the stock of assets, while wealth is the flow of payments.

• Wealth is the stock of assets built over time, while income is a flow of payments over a period of time.

• Wealth depends only on salary, while income includes other sources such as investments.

Why is minimum wage introduced in many economies?

• To reduce the bargaining power of workers

• To allow employers to cut costs

• To ensure workers receive a legally required wage

• To lower overall productivity

Which of the following is a negative effect of minimum wage policy?

• Increased employment opportunities

• Encouragement of more people to enter the workforce

• Higher rates of unemployment

• Elimination of workplace regulations

Why does income and wealth inequality slow down economic growth?

• It makes people richer

• It reduces job opportunities and investment

• It helps businesses grow faster

• It has no effect on the economy

What is a transfer payment?

• A payment made by firms to workers as wages

• A payment made between private businesses

• A payment made by the government to certain members of the community who may be unable to work or in need of assistance

• Â A tax collected by the government on inheritance

Which of the following is NOT an example of a transfer payment?

• Unemployment benefits

• Food coupons

• Income tax

• Old age pensions

What is a progressive tax?

• A tax that is the same for everyone

• A tax where the rate decreases as income rises

• A tax on every purchase, no matter the price

• A tax where the rate increases as income rises