Which of the Following Represents a Problem in Measuring Inequality

question 89

Multiple Choice

Which of the following represents a problem in measuring inequality?

• A)Measurements of income distributions typically include in-kind transfers, which distort the measure of inequality.
• B)A normal life-cycle pattern causes inequality in the income distribution but may not reflect inequality in living standards.
• C)Transitory income is a better measure of inequality than permanent income.
• D)Both a and b are correct.

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Definitions:

Federal Budget Deficit

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American Recovery

Refers to economic recovery efforts in the United States, particularly those following the Great Recession, including various fiscal and monetary policies aimed at restoring economic growth.

Reinvestment Act

A law designed to encourage investment in specific areas or sectors, often including provisions for tax credits and other financial incentives to stimulate economic growth.

Long-Run Performance

Refers to the sustained output and growth of an economy over an extended period, often analyzed to assess economic health and stability.