Income Inequality in Asia is on the Rise

1. Is an increase in the Gini coefficient the same thing as saying there is an increase in poverty? Why or why not?

No, because there could be no poverty, but still some inequality in the country.

2. There is concern over growing social unrest in rural China, targeted against the urban populations. Do you think this is related to the increase in income inequality? Why or why not?

In all likelihood, it plays a part, as income gains in China are particularly concentrated in the urban areas, not reaching out to the rural areas quite as much.

3. What kinds of policies can be enacted to reduce the level of income inequality?

Answers may vary. If the focus is outside redistribution, attention should be placed on education, etc; things that are designed to help those with lower incomes to find ways to have their incomes increase.

Multiple Choice/True False Questions

1. A Gini coefficient of 0 indicates
  1. Perfect inequality
  2. Perfect equality
  3. No income
  4. No poverty
      ANS. b

2. As the Gini coefficient rises over time
  1. Countries become more unequal.
  2. Countries become more equal.
  3. Countries become richer.
  4. Countries become poorer.
      ANS. a

3. As the Gini coefficient rises, the population gets poorer.
  1. True
  2. False
      ANS. b

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