Economists Believe That Looking at the Distribution of Income by Quintiles

question 96

Multiple Choice

Economists believe that looking at the distribution of income by quintiles at one moment overstates the true inequality of income because:

• A)it ignores the effect of taxes.
• B)it ignores the effect of transfer payments.
• C)families near the bottom of the distribution in any given year may be having an unusually bad year,while those at the top may be having an unusually good one.
• D)families near the bottom of the distribution in any given year are often having an unusually good year,while those at the top are often having an unusually bad one.