Income Inequality MCQs

Correct answer A. Average tax rate

Correct answer A. A proportional tax

Correct answer B. Regressive tax

Correct answer C. When households can alter their behaviour and do something to avoid paying a tax

Correct answer A. VAT

Correct answer C. A means-tested cash benefit

Correct answer B. If poor people earn more, their benefits fall, leaving them no better off

Correct answer C. A person's normal or average income

Correct answer B. They exaggerate the inequality of living standards

Correct answer A. Libertarianism

Correct answer B. Liberalism, utilitarianism, libertarianism

Correct answer D. The idea that people should consider policy as if behind a veil of ignorance about their circumstances in society, and the idea that people will then be particularly concerned about the possibility that they might find themselves at the bottom of the income distribution

Correct answer C. Unskilled workers, if the demand for labour is relatively elastic

Correct answer D. It generates a smaller disincentive to work than most alternative anti-poverty policies

Correct answer D. Both spending and labour-supply decisions

Correct answer A. It will decrease labour supply

Correct answer C. The income effect outweighs the substitution effect

Correct answer C. It increases, since the cost of giving up one hour of work increases

Correct answer C. The demand curve for accountants will shift to the right, since the productivity of accountants has increased

Correct answer A. The additional revenue a firm earns by employing one additional unit of labour