Questions and Answers
Which of the following is classified as a low-income country?
Identify the country that is categorized as a lower middle-income country.
Which of the following countries is NOT listed as low-income?
Among these countries, which one appears in the low-income category?
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Which country is cited as a lower middle-income but is geographically in Asia?
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What is the ratio of income per head of the richest to the poorest country?
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Which statistical measure is used to assess the average sum of squared deviations in per capita income?
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What must occur for the relative income gap between countries to narrow?
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What is the purpose of the coefficient of variation in income inequality measurement?
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What concept is derived from the Lorenz curve and widely used to measure income inequality?
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What is the primary unit of measurement in world or global inequality?
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How does weighted international inequality differ from international inequality?
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What does the Kuznets ratio measure?
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Which measure provides insight into income distribution at the extremes?
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What is a significant limitation of using a single statistic to analyze income distribution?
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Which of the following statements is true regarding different measures of inequality?
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In the context of income inequality analysis, what does a high Gini ratio potentially signify?
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What key aspect is typically overlooked when measuring using the Gini ratio?
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What relationship is commonly observed among the various measures of inequality over time?
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Which of the following options is NOT a focus of the weighted international inequality measure?
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Study Notes
Development Gap
- The income gap between the richest and poorest countries is approximately 700:1.
- Low-income countries have a ratio of income to high-income countries of about 60:1.
- Historical data indicate that this relative income gap is unprecedented.
Low-Income and Lower Middle-Income Countries
- A list of low-income countries includes Afghanistan, Bangladesh, Burundi, and Ethiopia among others.
- Lower middle-income countries include India, Bolivia, and Sri Lanka.
Statistical Measurements of Income Dispersion
- Standard deviation (SD) is used to measure the average deviation of each country's income from the mean income.
- Sigma divergence and convergence refer to movements in income ratio over time.
- The coefficient of variation normalizes SD, addressing the correlation between mean and SD.
Gini Ratio and Lorenz Curve
- The Gini ratio, derived from the Lorenz curve, measures income inequality based on population distribution.
- Three concepts of inequality are:
- International inequality treats each country as a unit.
- Weighted international inequality weights countries by population size.
- Global inequality measures differences at the individual level within countries.
Kuznets Ratio
- The Kuznets ratio compares the income of the poorest 10% of the world's population with the richest 10%.
- This metric can provide insights into income inequality and social justice that extend beyond the Gini ratio.
Lorenz Curve Distribution
- The Lorenz curve visually represents income distribution versus population percentage.
- Low-income countries receive only 2% of global income, despite having 9% of the population.
- Rich countries account for 75% of global income but consist of only 19% of the population.
Poverty Measurements
- The poverty gap at $1.90 a day (2011 PPP) reflects significant poverty levels:
- Low-income: 18.6%
- Lower middle income: 4.69%
- Sub-Saharan Africa: 16.47%
World Bank's Focus on Poverty
- The World Bank emphasizes poverty eradication, defining absolute poverty in terms of severe deprivation of basic human necessities.
- Historical quotes from former World Bank presidents indicate a progressive commitment to measuring development performance by poverty reduction metrics.
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Description
This quiz explores the concept of the development gap and the various ways poverty is measured across countries. It focuses on the differences between low-income, lower middle-income, and wealthier nations. Understand the implications of these classifications and their effects on global economic policies.
