The Gini coefficient is really a point estimate of equality at a certain time period. Why is this a limiting factor when it comes to examining issues of equality over a lifetime?
What will be an ideal response?
Typically, increases in the proportion of young or old members of a society will drive apparent changes in equality. Because of this, factors such as age distribution within a population and mobility within income classes can create the appearance of difference in equality when none exist taking into account demographic effects.
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Which of the following is an example of a good for which the demand is likely to become more elastic over time if price changes dramatically?
(A) Gourmet food (B) Prescription medicine (C) Gasoline (D) Shoe polish
Refer to Figure 9.7. After the policy was implemented, price became
A) $10. B) $30. C) $50. D) $70. E) between $50 and $70, but the price is uncertain because quantity can be any amount between 2000 and 4000.