Which of the following statements is the most accurate and complete summary of trends in income...

Which of the following statements is the most accurate and complete summary of trends in income inequality over the period 1950-2015, as presented in Unit 19?

Question 12 options:

	Most of the inequality in the world results from inequality between countries, which is declining.
	Inequality between individuals in most countries is declining.
	Most of the inequality in the world results from inequality between countries, rather than inequality within countries.
	The net effect of trends in within-country and between-country inequality is that inequality is falling.

For countries with a progressive tax system, when making the adjustment from market income to disposable income we would usually expect the Gini coefficient to ____, and in making the adjustment to final income we would expect it to ____.

Question 13 options:

	Rise; rise.
	Fall; rise.
	Rise; fall.
	Fall; fall.

If the central bank wants to increase spending in the economy it should ___________ the policy rate in order to make it ___________ to borrow.

Question 3 options:

	lower; cheaper
	raise; more expensive
	raise; cheaper
	lower; more expensive

Solutions

Expert Solution

Answer 1) C) Most of the inequality in the world results from inequality between countries, rather than inequality within countries.

Explanation - The inequality between the countries in terms of their gross domestic product, trade balance, production and all such economic factors leads to the inequality between them and on a global level hence Most of the inequality in the world results from inequality between countries, rather than inequality within countries.

Answer 2) B) Fall, Rise

Explanation- The distribution pattern of the wealth in the population is calculated by the Gini coefficient; in this case the as the market income is been adjusted to the disposable income and hence the Gini coefficient will fall and low Gini coefficient means more equal distribution of the wealth in the population.

Answer 3) Lower, Cheaper

Explanation- As the spending has to increased in the economy then borrowing rate should be cheaper and this can be done by lowering the policy rate by central bank.

Rahul Sunny answered 1 year ago

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