Economic Inequality and Social Welfare Quiz

GDP per capita measures the average income earned per person in a country, indicating the standard of living.

The Gini coefficient quantifies the extent of income inequality within a population.

The poverty line represents the income threshold below which individuals or families are considered to be living in poverty according to governmental standards.

Contrary to common belief, economic inequality does not necessarily lead to increased innovation.

The official poverty threshold is a commonly used measure to determine who is considered to be living in poverty.

The poverty line is a measure of relative poverty, representing the income level below which people are considered poor.

The wealth gap refers to the significant disparity in wealth distribution among individuals or households within a society.

Occupational segregation, where certain professions are dominated by one gender, contributes significantly to the gender pay gap.

North America typically exhibits higher levels of income inequality compared to other regions due to various socioeconomic factors.

Trickle-down economics posits that economic benefits for the wealthy will eventually 'trickle down' to benefit everyone.

Engel's law states that as income increases, the proportion spent on basic necessities decreases, allowing for greater spending on non-essential goods.

The Gini coefficient was first introduced by the Italian statistician Corrado Gini, but it was applied to measure income inequality in France.

Socialism advocates for government intervention to redistribute wealth and ensure social welfare, aiming to reduce economic inequality.

A flat tax system, where everyone pays the same tax rate regardless of income, does not aim to address economic inequality and may exacerbate it.

Convergence theory posits that as economies develop, economic inequality may naturally decrease as less developed regions catch up to more developed ones.