Question : Figure 18-4 10) Refer to Figure 18-4. Rank the above : 1388036

 

Figure 18-4

 

 

10) Refer to Figure 18-4. Rank the above panels in terms of most unequal income distribution to least unequal income distribution.

A) Panel A, Panel B, Panel C

B) Panel B, Panel C, Panel A

C) Panel A, Panel C, Panel B

D) Panel C, Panel B, Panel A

 

 

11) Suppose the United States has a Gini coefficient of 0.4 and Sweden has a Gini coefficient of 0.25. Which of the following statements is true?

A) The distribution of income is more equal in the United States.

B) The distribution of income is more equal in the Sweden.

C) Income distribution is changing faster in the United States.

D) Without information on population, it is not possible to compare income distribution between countries.

 

Figure 18-5

 

 

Figure 18-5 shows the Lorenz curve for a hypothetical country.

 

12) Refer to Figure 18-5.  The middle 20 percent of households

A) earn 20 percent of the society’s total income.

B) earn 36 percent of the society’s total income.

C) earn 48 percent of the society’s total income.

D) earn 50 percent of the society’s total income.

 

 

13) Refer to Figure 18-5.  The highest 20 percent of households

A) earn 24 percent of the society’s total income.

B) earn 28 percent of the society’s total income.

C) earn 42 percent of the society’s total income.

D) earn 72 percent of the society’s total income.

 

Figure 18-6

 

 

Figure 18-6 shows the Lorenz curves for Islandia and Syldavia.

 

14) Refer to Figure 18-6.  Which country has the more unequal distribution of income?

A) Islandia

B) Syldavia

C) They may have the same absolute income distribution although their relative income distribution is different.

D) There is insufficient information to answer the question.

 

 

15) Refer to Figure 18-6.  If area X = 2,060, area Y = 240, and area Z = 2,700, calculate the Gini coefficient for Islandia.

A) 0.41

B) 0.45

C) 0.70

D) 0.76

 

16) Refer to Figure 18-6.  If area X = 2,060, area Y = 240, and area Z= 2,700, calculate the Gini coefficient for Syldavia.

A) 0.05

B) 0.12

C) 0.46

D) 0.85

 

 

17) In the United States,

A) the income tax system has little or no impact on the distribution of income.

B) the after-tax income distribution of income is more equal than the before-tax distribution.

C) once a person is in poverty, it is very difficult for a person to get out of poverty.

D) the degree of income mobility is relatively low.

 

 

18) Which of the following tax systems would help reduce income inequality the most?

A) a regressive tax system

B) a proportional tax system

C) a progressive tax system

D) a consumption tax system

 

19) Absolute poverty measures vary from country to country. For example, in 2013, the poverty line in the United States for a family of four with two children was an annual income of $23,550 but economists often use a much lower threshold income of $1 per day when calculating the rate of poverty in poor countries. How is this absolute poverty measured?

A) by comparing the percentage of households living below the poverty line to the total population

B) by comparing a household’s income to the income required to maintain the average standard of living in a society at a particular time

C) by comparing the amount of goods and services that a household’s income can purchase to an objective measure of the amount of income needed to sustain a certain predetermined standard of living

D) by comparing the amount of goods and services that a household’s income can purchase in one country to the amount of goods and services that a household’s income can purchase in another country of comparable living standard