This quiz works best with JavaScript enabled. Home > Economics > Income > Distribution > Income Distribution – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Income Distribution Quiz 2 (21 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Reducing income differences is not an important factor in reducing poverty. A) True. B) False. C) Not stated. D) None of above. Show Answer Correct Answer: B) False. 2. With income of $ 10, 000 and paying $ 1, 000 in taxes, vs another with income of $ 100, 000 pays $ 4, 000 in tax, this is a: A) Flat Tax. B) Proportional Tax. C) Regressive tax. D) Progressive Tax. Show Answer Correct Answer: C) Regressive tax. 3. The gov't uses the POVERTY RATE to determine.. A) How many people donate money to charity. B) How much money poor people earn. C) How much money to take from the rich. D) How many people are living below the poverty threshold. Show Answer Correct Answer: D) How many people are living below the poverty threshold. 4. Which of the following is an advantage of having income equality? A) More consumer spending among the middle class. B) More use of natural resources and lower consumption. C) More consumer satisfaction among the rich. D) Greater political equalities. Show Answer Correct Answer: D) Greater political equalities. 5. Why is wealth unevenly distributed in the UK? A) People who earn the least, save the most. B) People who earn the most spend their income on investments. C) People who earn the most, spend the least. D) People who earn the least buy lots of assets. Show Answer Correct Answer: B) People who earn the most spend their income on investments. 6. Per the census, approximately what percentage of households from the lowest quintile move to a higher quintile in a lifetime? A) 0.35. B) 0.4. C) 0.7. D) 0.85. Show Answer Correct Answer: D) 0.85. 7. The term for a business cost that increases or decreases on a monthly basis, such as gas. A) Living Expenses. B) Variable Cost. C) Maintenance Cost. D) Fixed Cost. Show Answer Correct Answer: B) Variable Cost. 8. Money received as a reward for work A) Wage/ salary. B) Rent. C) Income. D) Values. Show Answer Correct Answer: A) Wage/ salary. 9. In a Lorenz diagram for income, the line of equality shows A) The most equitable income distribution. B) How unequally incomes are distributed. C) How much redistribution occurs. D) The income distribution if everyone received the same income. Show Answer Correct Answer: A) The most equitable income distribution. 10. Which policy helps to alleviate poverty? A) Both 1 and 2. B) State benefits. C) State provision, e.g. healthcare and education. D) None of above. Show Answer Correct Answer: A) Both 1 and 2. 11. The things you like and enjoy doing. A) Interests. B) Aptitudes. C) Abilities. D) Values. Show Answer Correct Answer: A) Interests. 12. When a household does not have sufficient income to sustain even a basic acceptable standard of living / meet basic needs-it is referred to as A) Under the poverty level. B) Poverty. C) Being poor. D) Absolute poverty. Show Answer Correct Answer: D) Absolute poverty. 13. In wealthy countries, the poverty line is at US Dollars 2.50 a day. A) True. B) False. C) Not stated. D) None of above. Show Answer Correct Answer: B) False. 14. A Gini Coefficent of zero represents ..... A) Perfect Equality. B) Maximal Inequality. C) Negative Contribution. D) None of above. Show Answer Correct Answer: A) Perfect Equality. 15. The poor in the wealthiest countries create serious social problems in society. A) True. B) False. C) Not stated. D) None of above. Show Answer Correct Answer: A) True. 16. Benefits that are paid only to those whose incomes fall below a certain level A) Progressive tax. B) Means tested benefits. C) Direct provision. D) Universal benefits. Show Answer Correct Answer: B) Means tested benefits. 17. What is the distribution of income? A) The way producers pay their staff. B) How incomes are shared out between individuals and households. C) The way the government makes money. D) None of above. Show Answer Correct Answer: B) How incomes are shared out between individuals and households. 18. What is the correct definition of the term income? A) The reward for working. B) The reward for the service provided the government. C) The reward for the service provided by an employee. D) The reward for the service provided by a factor of production, including labour. Show Answer Correct Answer: D) The reward for the service provided by a factor of production, including labour. 19. A State pension is an example of A) Universal benefits. B) Direct action. C) Means Tested benefit. D) Taxation. Show Answer Correct Answer: A) Universal benefits. 20. A value of 0 of Gini Coefficient indicates A) Perfect equality. B) Perfect inequality. C) Moderately equal. D) None of the above. Show Answer Correct Answer: A) Perfect equality. 21. A portion of one's personal income paid to a government (one correct answer) A) Variable Cost. B) Fixed Cost. C) Taxes. D) Income Tax. Show Answer Correct Answer: D) Income Tax. ← PreviousRelated QuizzesIncome QuizzesEconomics QuizzesIncome Distribution Quiz 1 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books