2.7-Income distribution and welfare

Question 1

What is income distribution?

Answer 1

Income distribution refers to how a nation’s total income is distributed among its population.

Question 2

True or False: Income distribution is only concerned with how much money individuals earn.

Answer 2

False

Question 3

What is the Lorenz Curve used for?

Answer 3

The Lorenz Curve is used to illustrate the distribution of income or wealth within a population.

Question 4

Fill in the blank: The _____ coefficient measures the degree of income inequality in a society.

Answer 4

Gini

Question 5

What does a Gini coefficient of 0 represent?

Answer 5

A Gini coefficient of 0 represents perfect equality in income distribution.

Question 6

What does a Gini coefficient of 1 represent?

Answer 6

A Gini coefficient of 1 represents perfect inequality in income distribution.

Question 7

Multiple Choice: Which of the following is a measure of income inequality? A) GDP B) Gini Coefficient C) Unemployment Rate

Answer 7

B) Gini Coefficient

Question 8

What is meant by ‘welfare’ in economics?

Answer 8

Welfare in economics refers to the overall well-being and quality of life of individuals in a society.

Question 9

True or False: Welfare economics focuses only on financial aspects of individuals’ lives.

Answer 9

False

Question 10

What is the primary goal of welfare economics?

Answer 10

The primary goal of welfare economics is to evaluate the economic well-being of individuals and groups.

Question 11

Fill in the blank: The concept of _____ involves the redistribution of income to achieve greater equity.

Answer 11

social justice

Question 12

What are progressive taxes?

Answer 12

Progressive taxes are taxes that take a larger percentage from high-income earners than from low-income earners.

Question 13

Multiple Choice: Which of the following is NOT a method of income redistribution? A) Taxation B) Social Welfare Programs C) Increased tariffs

Answer 13

C) Increased tariffs

Question 14

What is the role of social welfare programs?

Answer 14

Social welfare programs aim to provide financial assistance and support to individuals and families in need.

Question 15

True or False: A higher GDP always leads to better income distribution.

Answer 15

False

Question 16

What is the relationship between economic growth and income distribution?

Answer 16

Economic growth does not guarantee equitable income distribution; it can lead to increased inequality.

Question 17

Fill in the blank: The _____ effect describes how economic growth can lead to a rise in income inequality initially.

Answer 17

Kuznets

Question 18

What is meant by ‘absolute poverty’?

Answer 18

Absolute poverty refers to a condition where an individual lacks the basic necessities for survival.

Question 19

What is ‘relative poverty’?

Answer 19

Relative poverty is a condition where an individual’s income is significantly less than the average income of the population.

Question 20

Multiple Choice: Which measure focuses on the standard of living? A) GDP B) HDI C) CPI

Answer 20

B) HDI

Question 21

What does HDI stand for?

Answer 21

HDI stands for Human Development Index.

Question 22

True or False: The Human Development Index includes income as its only component.

Answer 22

False

Question 23

What are the three dimensions measured by the HDI?

Answer 23

The three dimensions are health, education, and standard of living.

Question 24

Fill in the blank: Policies aimed at reducing income inequality are often referred to as _____ policies.

Answer 24

redistributive

Question 25

What is meant by 'meritocracy'?

Answer 25

Meritocracy is a social system in which individuals are rewarded based on their abilities and achievements.

Question 26

True or False: Meritocracy ensures equal income distribution.

Answer 26

False

Question 27

What is the impact of globalization on income distribution?

Answer 27

Globalization can lead to increased income inequality within countries, although it may reduce inequality between countries.

Question 28

Multiple Choice: Which factor can contribute to income inequality? A) Education B) Employment Opportunities C) Both A and B

Answer 28

C) Both A and B

Question 29

What role does education play in income distribution?

Answer 29

Education affects income distribution by influencing individuals' earning potential and job opportunities.

Question 30

Fill in the blank: The _____ hypothesis suggests that as economies develop, income inequality first increases and then decreases.

Answer 30

Kuznets