Understanding Income Inequality and Redistribution

What is the primary focus of the 'Cash Course' series?

• Financial literacy

• Art history

• Cooking techniques

• Travel tips

What does a Lorenz curve illustrate?

• The rate of inflation over time

• The growth of a country's GDP

• The distribution of wealth among a population

• The number of people employed in a sector

What is the Gini coefficient used to measure?

• Economic growth

• Tax rates

• Income inequality

• Population density

What is a common method governments use to redistribute wealth?

• Reducing interest rates

• Increasing exports

• Encouraging foreign investment

• Collecting taxes from higher earners

What is a potential downside of government redistribution?

• It reduces social mobility

• It leads to more efficient markets

• It increases motivation to work

• It can disincentivize work

What is one argument in favor of wealth redistribution?

• It increases income inequality

• It reduces government size

• It discourages education

• It prevents social unrest

What is a common result of heavy redistribution policies?

• Higher economic growth

• Social unrest and division

• Decreased government spending

• Increased social harmony

How do Sweden and Denmark handle income inequality?

• By blending a free market with high taxes

• By focusing solely on private charity

• By having low taxes and no social safety net

• By eliminating all forms of taxation

What is a characteristic of command economies regarding wealth distribution?

• They often concentrate wealth among a few

• They rely on private sector solutions

• They ensure equal wealth for all

• They have no government intervention

What is a key feature of the US approach to income inequality?

• No economic growth

• Complete income equality

• Low redistribution and high social mobility

• High taxes and low social mobility