Income Distribution Quiz 2 (20 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. GMI stands for .....

Correct Answer: C) Gross Monthly Income.

2. Studies have shown that the poor in wealthy countries are able to cope better than the poor in poorer countries.

Correct Answer: B) False.

3. The farther away a Lorenz curve for income is from the line of equality, the

Correct Answer: C) Less equally income is distributed.

4. Figure 1 shows the gap between the richest and the poorest in South Asia is smaller that that in Latin America.

Correct Answer: A) True.

5. Cutting benefits

Correct Answer: D) All the above.

6. Per the census, approx. what percentage of households from the lowest quintile move to a higher quintile after 10 yrs?

Correct Answer: D) 0.6.

7. What does the Gini Coefficent identify?

Correct Answer: A) Economic inequality/equality.

8. Income amount remaining after a year's worth of deductions have been taken.

Correct Answer: D) Net Annual Income (NAI).

9. Which of the following factors of production gives the reward interest?

Correct Answer: C) Capital.

10. Which of the following is a reason why income in the UK is unevenly distributed?

Correct Answer: A) There is a difference in the wages that people earn.

11. A progressive tax

Correct Answer: C) Takes a smaller percentage in tax from low income earners.

12. Reducing income differences is not an important factor in reducing poverty.

Correct Answer: B) False.

13. 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:

Correct Answer: A) Regressive tax.

14. The gov't uses the POVERTY RATE to determine..

Correct Answer: C) How many people are living below the poverty threshold.

15. Which of the following is an advantage of having income equality?

Correct Answer: D) Greater political equalities.

16. Why is wealth unevenly distributed in the UK?

Correct Answer: C) People who earn the most spend their income on investments.

17. Per the census, approximately what percentage of households from the lowest quintile move to a higher quintile in a lifetime?

Correct Answer: A) 0.85.

18. The term for a business cost that increases or decreases on a monthly basis, such as gas.

Correct Answer: C) Variable Cost.

19. Money received as a reward for work

Correct Answer: C) Wage/ salary.

20. In a Lorenz diagram for income, the line of equality shows

Correct Answer: A) The most equitable income distribution.