Micro 6.5-Income Inequality MCQ Open Practice

Inequality of income distribution

Total wealth of a nation

Economic growth rate

Unemployment rate

Inflation rate

Average household income

Cumulative distribution of income

Unemployment trends

Interest rates over time

Government spending

Area between the line of equality and Lorenz curve divided by total area beneath the line of equality

Total GDP divided by population

Difference between highest and lowest incomes divided by the average income

Sum of wealth distribution divided by the number of households

Average income growth rate times the population

A tax where the rate increases as income increases

A tax that is applied equally to all income levels

A flat rate tax

A tax that decreases as income increases

A tax based on sales

The tax rate decreases as income increases

The tax rate remains constant for all income levels

The tax rate increases as income increases

The tax is only applied to luxury goods

The tax is based on the wealth of the individual

All income levels are taxed at the same rate

Higher income levels pay higher rates

Tax rate decreases with increased income

Only investment income is taxed

Tax applies to sales only

Progressive tax

Regressive tax

Sales tax

Proportional tax

Estate tax

It increases the tax burden on low-income individuals

It requires complex calculations

It does not generate sufficient revenue

It discourages investment

It is difficult to enforce

Everyone has the same income

Largest GDP

Perfect economic growth

Maximum unemployment rate

Ideal inflation rate

It can reduce income inequality more effectively

It simplifies the tax code

It generates less revenue

It is favored by high earners

It applies to luxury goods only