Simon Kuznets Hypothesized That at Low Levels of Per Capita

question 40

Multiple Choice

Simon Kuznets hypothesized that at low levels of per capita income, increases in income would lead to increases in income inequality because

• A) in less developed countries, the rich are able to save and invest and therefore enrich themselves, while the poor remain at essentially the same economic level.
• B) structural changes that often accompany early growth, such as rural-urban migration, occupational changes, and environmental degradation, disproportionately hurt poorer people.
• C) growth enhancing policies tend to favor middle-income and high-income households rather than poor households.
• D) development processes tend to be concentrated in the manufacturing sector and not in work in the agricultural sector which employs mostly low-income people.

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Definitions:

Pareto Analysis

A statistical technique in decision-making used for the selection of a limited number of tasks that produce significant overall effect. It uses the principle that 80% of results come from 20% of the actions.

Transactions Account

A bank account that allows for the direct deposit and withdrawal of funds without any limitation on the frequency of transactions.

Global Database

A comprehensive collection of data organized and stored digitally, accessible worldwide.

Technical Standards

Specifications and guidelines established by consensus among professionals that ensure the reliability, safety, and interoperability of products, services, and systems.