Question 1

Which of the following best describes the global pattern of income inequality from 1820 to 2018?

Accepted Answer

Income inequality between countries has increased dramatically, while within-country inequality has also risen in many countries.

Question 2

What is the primary purpose of using 'purchasing power parity' (PPP) when comparing average incomes across countries?

Accepted Answer

To account for differences in the cost of living and make income comparisons more meaningful.

Question 3

Suppose Country A has a rich/poor ratio of 244 and Country B has a rich/poor ratio of 66. What does this imply about income distribution in these countries?

Accepted Answer

Country A has a more unequal income distribution than Country B.

Question 4

In 2020, the richest 10% of people in the United Arab Emirates had an income per capita of approximately $390,000. If the average income in Norway was nearly seven times higher than in Nigeria, what does this suggest about the global income distribution?

Accepted Answer

Income differences between countries are much larger than within countries.

Question 5

If the share of the world population living in extreme poverty fell from 74% in 1820 to around 10% in recent years, which of the following is most likely true?

Accepted Answer

Extreme poverty has become rare, but significant income inequality persists.

Question 6

Consider two countries: Country X has a tall 'skyscraper' at the back of its income distribution bar in 2020, while Country Y's bars are more uniform in height. What can you infer about these countries?

Accepted Answer

Country X has greater income inequality, with a much richer top 10% compared to the rest.

Question 7

If the average daily income in China is $$14.70 and in India is 4.50 ($$measured in 2011 international dollars), what is the ratio of China's average income to India's?

Accepted Answer

$$ \frac{14.70}{4.50} = 3.27 $$

Question 8

Which of the following statements about income inequality in the fourteenth century is most accurate, based on the study materials?

Accepted Answer

Income differences within countries were significant, but differences between countries were relatively minor.

Question 9

If a country’s rich/poor ratio increases from 100 in 1980 to 300 in 2020, what does this indicate about the country’s income distribution?

Accepted Answer

Income inequality has increased, with the richest 10% pulling further ahead of the poorest 10%.

Question 10

Suppose Indonesia and Brazil had bars of similar width in the 2020 global income distribution figure. What does this imply?

Accepted Answer

They have similar population sizes.

Question 11

If the average income in Norway is nearly seven times the average income in Nigeria, and the rich/poor ratio in Norway is 66 while in Nigeria it is 174, which of the following is true?

Accepted Answer

Norway has both higher average income and lower income inequality than Nigeria.

Question 12

Which of the following best explains why the richest 10% in the United Arab Emirates have much higher incomes than the richest 10% in Norway, despite Norway having a high GDP per capita?

Accepted Answer

Norway's income is more evenly distributed, so its richest 10% are less far ahead of the rest.

Question 13

If a country’s income distribution is represented by bars of equal height for all deciles, what would its rich/poor ratio be?

Accepted Answer

$$ 1 $$

Question 14

Which of the following is NOT a reason for using international dollars when comparing incomes across countries?

Accepted Answer

To measure only the income of the richest 10% in each country.

Question 15

If the income of the richest 10% in a country is $$100,000 and the income of the poorest 10% is 500$$, what is the rich/poor ratio?

Accepted Answer

$$ \frac{100,000}{500} = 200 $$

Question 16

Which of the following statements is supported by the data on global income distribution between 1980 and 2020?

Accepted Answer

Some countries have seen the emergence of very tall 'skyscrapers', indicating increased inequality.

Question 17

If a country’s average income increases but its rich/poor ratio also increases, what does this suggest?

Accepted Answer

Both average income and income inequality have increased.

Question 18

Which of the following best describes the change in global poverty since 1820?

Accepted Answer

The share of the world population living in extreme poverty has decreased dramatically.

Question 19

If the richest 10% in India have an average income of $$50,000 and the poorest 10% have 200$$, what is the rich/poor ratio?

Accepted Answer

$$ \frac{50,000}{200} = 250 $$

Question 20

Which of the following is a plausible explanation for the 'skyscraper' effect in the income distribution of some countries by 2020?

Accepted Answer

A significant increase in the income of the richest 10% relative to the rest of the population.

Global Income Inequality: Historical and Contemporary Perspectives

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