#1
Which of the following measures is commonly used to represent economic inequality?
Gini coefficient
ExplanationStatistical measure of distribution inequality within a population.
#2
What is the primary aim of progressive taxation?
To tax higher incomes at a higher rate
ExplanationTax system where tax rates increase as income increases.
#3
Which economic theory suggests that economic inequality is necessary for stimulating investment and growth?
Trickle-down economics
ExplanationBelief that benefits for the wealthy will 'trickle down' to benefit everyone.
#4
Which economic indicator often correlates with higher levels of economic inequality?
Higher poverty rate
ExplanationIncreased poverty rates in areas with higher economic inequality.
#5
Which of the following is NOT a potential consequence of high economic inequality?
Higher economic growth
ExplanationEconomic theory suggests inequality can hinder overall growth.
#6
What is a common argument against implementing universal basic income (UBI) as a policy to address economic inequality?
It discourages work
ExplanationConcern that UBI may reduce incentive to work.
#7
Which factor contributes to the persistence of economic inequality across generations?
Access to education
ExplanationUnequal access to education perpetuates inequality.
#8
What is meant by the term 'income mobility' in the context of economic inequality?
The movement of individuals between income quintiles over time
ExplanationAbility for individuals to change income levels over their lifetime.
#9
Which of the following is an example of regressive taxation?
Sales tax
ExplanationTax where the rate decreases as income increases.
#10
In the context of economic inequality, what does the term 'redistribution' refer to?
The process of wealth being transferred from higher-income to lower-income individuals
ExplanationEffort to reduce inequality by reallocating resources.
#11
Which economic theory suggests that economic inequality arises due to differences in the ownership of productive resources?
Marxian economics
ExplanationFocuses on ownership disparities as a source of inequality.
#12
What is the 'Matthew effect' in the context of economic inequality?
The tendency for the rich to become richer and the poor to become poorer
ExplanationWealthy individuals benefit disproportionately from economic policies.
#13
Which economic concept suggests that individuals maximize utility by weighing the benefits and costs of each action, including charitable giving?
Rational choice theory
ExplanationIndividuals make choices to maximize personal benefit.