Economics: The Basics 1st Edition by Mike Mandel

Exercise 5

Say whether each of the following statements is true or false.
a) Annual income, as measured by the U.S. Census Bureau, includes Social Security payments and the interest on savings accounts.
b) A quintile represents 25 percent of households.
c) One definition of income inequality is the difference between the best-off and the worst-off members of the economy.
d) If the 80/20 ratio increases, inequality is rising.
e) Judging by the increase in the 80/20 ratio, the rise in inequality has been dramatic.
f) One reason for rising inequality has been the introduction of computers into the workplace.
g) An important reason for rising inequality has been the increase in the minimum wage, adjusted for inflation.
h) The poverty rate has dropped sharply since 2000.
i) One argument in favor of government intervention to reduce inequality is that more equal societies experience weaker growth.
j) One argument against government intervention to reduce inequality is that it will give government too much control over the economy.
k) With a progressive tax, after-tax income distribution will be less equal than pretax income distribution.
l) The federal tax system has become more progressive over the years.
m) Education differences can help explain much of the gender pay gap.