A study by the World Institute for Development Economics Research at United Nations University reports that the richest 1% of adults alone owned 40% of global assets in the year 2000. The three richest people in the world possess more financial assets than the lowest 48 nations combined. The combined wealth of the "10 million dollar millionaires" grew to nearly $41 trillion in 2008. A January 2014 report by Oxfam claims that the 85 wealthiest individuals in the world have a combined wealth equal to that of the bottom 50% of the world's population, or about 3.5 billion people. According to a Los Angeles Times analysis of the report, the wealthiest 1% owns 46% of the world's wealth; the 85 richest people, a small part of the wealthiest 1%, own about 0.7% of the human population's wealth, which is the same as the bottom half of the population. More recently, in January 2015, Oxfam reported that the wealthiest 1 percent will own more than half of the global wealth by 2016. An October 2014 study by Credit Suisse also claims that the top 1% now own nearly half of the world's wealth and that the accelerating disparity could trigger a recession. In October 2015, Credit Suisse published a study which shows global inequality continues to increase, and that half of the world's wealth is now in the hands of those in the top percentile, whose assets each exceed $759,900. A 2016 report by Oxfam claims that the 62 wealthiest individuals own as much wealth as the poorer half of the global population combined. Oxfam's claims have however been questioned on the basis of the methodology used: by using net wealth (adding up assets and subtracting debts), the Oxfam report, for instance, finds that there are more poor people in the United States and Western Europe than in China (due to a greater tendency to take on debts).[unreliable source?][unreliable source?] Anthony Shorrocks, the lead author of the Credit Suisse report which is one of the sources of Oxfam's data, considers the criticism about debt to be a "silly argument" and "a non-issue . . . a diversion."
What percentage of global assets does the richest 1% of people have?
Ground Truth Answers: 40%40%40%40
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According to Oxfam, the 85 richest people have wealth equal to how many average people?
Ground Truth Answers: about 3.5 billion people3.5 billion50%3.5 billion
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In order to be considered in the top percentile, a person would need to amass how much money each year?
Ground Truth Answers: $759,900$759,900$759,900
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What has caused Oxfam's findings to be questioned?
Ground Truth Answers: the methodology usedbasis of the methodology used"silly argument" and "a non-issue . . . a diversion."basis of the methodology
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Why does Oxfam and Credit Suisse believe their findings are being doubted?
Ground Truth Answers: a diversionthe basis of the methodology usedthere are more poor people in the United States and Western Europe than in China
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What percent of the global assets in 2000 were owned by just 1% of adults?
Ground Truth Answers: 40%40%40%40
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What do the three richest people in the world posses more of than the lowest 48 nations together?
Ground Truth Answers: financial assetsfinancial assetspossess more financial assets than the lowest 48 nations combined.financial assets
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How much was the combined wealth of the "10 Million dollar millionaires" in 2008?
Ground Truth Answers: nearly $41 trillion$41 trillionthe "10 million dollar millionaires" grew to nearly $41 trillion in 2008$41 trillion
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How much of the global wealth will the wealthiest 1 percent own by 2016?
Ground Truth Answers: halfmore than halfown more than half of the global wealth by 2016more than half
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Why are there more poor people in the United States and Europe than China?
Ground Truth Answers: greater tendency to take on debtsgreater tendency to take on debtsgreater tendency to take on debts
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According to PolitiFact the top 400 richest Americans "have more wealth than half of all Americans combined." According to the New York Times on July 22, 2014, the "richest 1 percent in the United States now own more wealth than the bottom 90 percent". Inherited wealth may help explain why many Americans who have become rich may have had a "substantial head start". In September 2012, according to the Institute for Policy Studies, "over 60 percent" of the Forbes richest 400 Americans "grew up in substantial privilege".
How many Americans are richer than more than half of all citizens?
Ground Truth Answers: 400400400
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What publication printed that the wealthiest 1% have more money than those in the bottom 90%?
Ground Truth Answers: New York TimesNew York TimesNew York Times
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What is considered as a potential advantage for wealth for some Americans?
Ground Truth Answers: Inherited wealthInherited wealthInherited wealth
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What did the richest 400 Americans have as children that helped them be successful adults?
Ground Truth Answers: grew up in substantial privilegesubstantial privilegesubstantial privilege
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What do the top 400 richest Americans have more of than half of all Americans combined?
Ground Truth Answers: wealthwealthwealth
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Who owns more wealth than the bottom 90 percent of people in the U.S.?
Ground Truth Answers: richest 1 percentrichest 1 percentrichest 1 percent
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What may explain why some Americans who've become rich may have had a head start?
Ground Truth Answers: Inherited wealthInherited wealthInherited wealth
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How many of the richest 400 Americans grew up in substantial privilege?
Ground Truth Answers: over 60 percentover 60 percentover 60 percent
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What Institute published findings in September 2012 regarding the Forbes richest 400 Americans?
Ground Truth Answers: Institute for Policy StudiesInstitute for Policy StudiesPolitiFact
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Neoclassical economics views inequalities in the distribution of income as arising from differences in value added by labor, capital and land. Within labor income distribution is due to differences in value added by different classifications of workers. In this perspective, wages and profits are determined by the marginal value added of each economic actor (worker, capitalist/business owner, landlord). Thus, in a market economy, inequality is a reflection of the productivity gap between highly-paid professions and lower-paid professions.
What philosophy of thought addresses wealth inequality?
Ground Truth Answers: Neoclassical economicsNeoclassical economicsNeoclassical economics
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What is income inequality attributed to?
Ground Truth Answers: differences in value added by labor, capital and landdifferences in value added by labor, capital and landdifferences in value added by different classifications of workers
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What impacts distribution of wealth when evaluating labor?
Ground Truth Answers: different classifications of workersdifferences in value added by different classifications of workersdifferences in value added by different classifications of workers
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What is the term that describes the difference between what higher paid and lower paid professionals earn?
Ground Truth Answers: productivity gapproductivity gapproductivity gap
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How is income determined in a market with variously skilled workers?
Ground Truth Answers: marginal value added of each economic actordifferences in valuemarginal value added of each economic actor
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What did Neoclassical economics view the inequality in the distribution of income as being from?
Ground Truth Answers: differences in value added by labor, capital and landdifferences in value added by labor, capital and landdifferences in value added by labor, capital and land
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What is distribution of income from labor due to the differences of?
Ground Truth Answers: value added by different classifications of workersvalue added by labor, capital and landvalue added
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What does the marginal value added by an economic actor determine?
Ground Truth Answers: wages and profitswages and profitswages and profits
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What are examples of economic actors?
Ground Truth Answers: worker, capitalist/business owner, landlordworker, capitalist/business owner, landlordworker, capitalist/business owner, landlord
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In a market economy, what is inequality a reflection of?
Ground Truth Answers: productivity gap between highly-paid professions and lower-paid professionsproductivity gapproductivity gap
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In Marxian analysis, capitalist firms increasingly substitute capital equipment for labor inputs (workers) under competitive pressure to reduce costs and maximize profits. Over the long-term, this trend increases the organic composition of capital, meaning that less workers are required in proportion to capital inputs, increasing unemployment (the "reserve army of labour"). This process exerts a downward pressure on wages. The substitution of capital equipment for labor (mechanization and automation) raises the productivity of each worker, resulting in a situation of relatively stagnant wages for the working class amidst rising levels of property income for the capitalist class.
What pushes businesses to increase pressures on workers?
Ground Truth Answers: reduce costs and maximize profitssubstitution of capital equipment for laborpressure to reduce costs and maximize profits
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What impact does workers working harder have on productivity of a business?
Ground Truth Answers: less workers are requiredraises the productivity of each worker,
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When less workers are required, what happens to the job market?
Ground Truth Answers: increasing unemploymentincreasing unemploymentincreasing unemployment
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What impact does higher worker productivity and leveled pay have on higher earners?
Ground Truth Answers: rising levels of property incomerising levels of property incomedownward pressure on wages
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What do capitalist firms substitute equipment for in a Marxian analysis?
Ground Truth Answers: labor inputslabor inputs (workers)labor inputs
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Why do firms substitute equipment for workers?
Ground Truth Answers: reduce costs and maximize profitsto reduce costs and maximize profitsraises the productivity of each worker
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What trend increases the organic composition of capital over the long term?
Ground Truth Answers: substitute capital equipmentincreasingly substitute capital equipment for labor inputspressure to reduce costs and maximize profits
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What does the substitution of equipment for labor raise for workers?
Ground Truth Answers: productivityorganic composition of capitalproductivity
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What type of wages does mechanization and automation lead to?
Ground Truth Answers: stagnantstagnant wagesstagnant
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In a purely capitalist mode of production (i.e. where professional and labor organizations cannot limit the number of workers) the workers wages will not be controlled by these organizations, or by the employer, but rather by the market. Wages work in the same way as prices for any other good. Thus, wages can be considered as a function of market price of skill. And therefore, inequality is driven by this price. Under the law of supply and demand, the price of skill is determined by a race between the demand for the skilled worker and the supply of the skilled worker. "On the other hand, markets can also concentrate wealth, pass environmental costs on to society, and abuse workers and consumers." "Markets, by themselves, even when they are stable, often lead to high levels of inequality, outcomes that are widely viewed as unfair." Employers who offer a below market wage will find that their business is chronically understaffed. Their competitors will take advantage of the situation by offering a higher wage the best of their labor. For a businessman who has the profit motive as the prime interest, it is a losing proposition to offer below or above market wages to workers.
What is controled by the market and economy?
Ground Truth Answers: workers wagesworkers wageswages
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Under what law is value of a worker determined?
Ground Truth Answers: supply and demandlaw of supply and demandsupply and demand
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What happens when business underpays their workers?
Ground Truth Answers: business is chronically understaffedtheir business is chronically understaffedchronically understaffed
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How do competing businesses attract workers?
Ground Truth Answers: offering a higher wageby offering a higher wageoffering a higher wage the best of their labor
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How is income inequality generally viewed by workers?
Ground Truth Answers: unfairunfairunfair
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What controls wages in a purely capitalist mode of production?
Ground Truth Answers: the marketmarketmarket
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What do wages work in the same way as for any other good?
Ground Truth Answers: pricesfunction of market price of skillprices
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What can be considered as a function of market price of skill?
Ground Truth Answers: wageswageswages
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What can concentrate wealth, pass environmental costs on to society and abuse both workers and consumers?
Ground Truth Answers: marketsmarketsmarkets
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What type of outcomes can even stable markets lead to?
Ground Truth Answers: unfairhigh levels of inequalityhigh levels of inequality
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A job where there are many workers willing to work a large amount of time (high supply) competing for a job that few require (low demand) will result in a low wage for that job. This is because competition between workers drives down the wage. An example of this would be jobs such as dish-washing or customer service. Competition amongst workers tends to drive down wages due to the expendable nature of the worker in relation to his or her particular job. A job where there are few able or willing workers (low supply), but a large need for the positions (high demand), will result in high wages for that job. This is because competition between employers for employees will drive up the wage. Examples of this would include jobs that require highly developed skills, rare abilities, or a high level of risk. Competition amongst employers tends to drive up wages due to the nature of the job, since there is a relative shortage of workers for the particular position. Professional and labor organizations may limit the supply of workers which results in higher demand and greater incomes for members. Members may also receive higher wages through collective bargaining, political influence, or corruption.
What has the tendency to increase wages in a field or job position?
Ground Truth Answers: Competition amongst workershigh demandcompetition between employers for employees
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When there are many workers competing for a few jobs its considered as what?
Ground Truth Answers: low demandhigh supplylow wage
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What is the potential earnings for a job where there are few skilled workers but many available positions?
Ground Truth Answers: high wageshigh wageshigh wages
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What can lead to higher wages for members of labor organizations?
Ground Truth Answers: collective bargaining, political influence, or corruptioncollective bargaining, political influence, or corruptioncollective bargaining, political influence, or corruption
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Who works to get workers higher compensation?
Ground Truth Answers: Professional and labor organizationsProfessional and labor organizationsProfessional and labor organizations
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What does many workers willing to work for a lot of time competing for a job that only requires a few workers result in?
Ground Truth Answers: low wagecompetitionlow wage
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What drives down wages in a job with many workers willing to work a lot?
Ground Truth Answers: competition between workerscompetitioncompetition
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Why does competition among workers drive down wages?
Ground Truth Answers: expendable nature of the worker(high supply) competing for a job that few require (low demand)the expendable nature of the worker in relation to his or her particular job
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What type of wages result from jobs where there is low supply but high demand?
Ground Truth Answers: highhigh wageshigh
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While competition between workers drives down wages for jobs with a high supply of worker, whose competition drives wages up for the inverse?
Ground Truth Answers: employersemployersemployers
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On the other hand, higher economic inequality tends to increase entrepreneurship rates at the individual level (self-employment). However, most of it is often based on necessity rather than opportunity. Necessity-based entrepreneurship is motivated by survival needs such as income for food and shelter ("push" motivations), whereas opportunity-based entrepreneurship is driven by achievement-oriented motivations ("pull") such as vocation and more likely to involve the pursue of new products, services, or underserved market needs. The economic impact of the former type of entrepreneurialism tends to be redistributive while the latter is expected to foster technological progress and thus have a more positive impact on economic growth.What increases with the increase of income inequality?
Ground Truth Answers: entrepreneurship ratesentrepreneurship ratesentrepreneurship rates
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Survivial is at the heart of what concept for workers?
Ground Truth Answers: Necessity-based entrepreneurshipNecessity-based entrepreneurshipNecessity-based entrepreneurship
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What type of motivators are food and shelter considered?
Ground Truth Answers: push"push" motivations"push"
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What type of motivators are achievement and self determination considered?
Ground Truth Answers: pull"pull""pull"
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What type of entrepreneurship leads to advancements in technology?
Ground Truth Answers: opportunity-based entrepreneurshipopportunity-based entrepreneurshipopportunity-based
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What increases entrepreneurship rates at the individual level?
Ground Truth Answers: higher economic inequalityhigher economic inequalityhigher economic inequality
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What is the increased rates of self-employment based on?
Ground Truth Answers: necessitynecessity rather than opportunity
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Survival needs such as income for food and shelter motivates what type of entrepreneurship?
Ground Truth Answers: Necessity-basedNecessity-based entrepreneurshipNecessity-based
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What motivation is opportunity-based entrepreneurship driven by?
Ground Truth Answers: achievement-orientedachievement-oriented motivations ("pull")achievement-oriented motivations
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What type of impact does opportunity-based entrepreneurship tend to have on economic growth?
Ground Truth Answers: positivepositivemore positive
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Another cause is the rate at which income is taxed coupled with the progressivity of the tax system. A progressive tax is a tax by which the tax rate increases as the taxable base amount increases. In a progressive tax system, the level of the top tax rate will often have a direct impact on the level of inequality within a society, either increasing it or decreasing it, provided that income does not change as a result of the change in tax regime. Additionally, steeper tax progressivity applied to social spending can result in a more equal distribution of income across the board. The difference between the Gini index for an income distribution before taxation and the Gini index after taxation is an indicator for the effects of such taxation.
What is it called when the tax rate and base amount increase simultaneously?
Ground Truth Answers: progressive taxprogressive taxprogressive
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What tax rate has a direct relationship with income inequality?
Ground Truth Answers: top tax rateprogressive taxtop
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What can work to even the distribution of wealth?
Ground Truth Answers: social spendingsocial spendingsteeper tax progressivity applied to social spending
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What system has an impact on income inequality?
Ground Truth Answers: tax systemprogressive tax systemprogressive tax
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In a progressive tax, what increases as the taxable base amount increases?
Ground Truth Answers: the tax ratetax ratetax rate
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What will have a direct impact of inequality in a system that uses a progressive tax?
Ground Truth Answers: level of the top tax ratelevel of the top tax ratetop tax rate
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What can result in more equal distribution of income?
Ground Truth Answers: steeper taxsocial spendingsteeper tax progressivity
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What index is an indicator of the effects of taxes applied to social spending?
Ground Truth Answers: the Gini indexGiniGini
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An important factor in the creation of inequality is variation in individuals' access to education. Education, especially in an area where there is a high demand for workers, creates high wages for those with this education, however, increases in education first increase and then decrease growth as well as income inequality. As a result, those who are unable to afford an education, or choose not to pursue optional education, generally receive much lower wages. The justification for this is that a lack of education leads directly to lower incomes, and thus lower aggregate savings and investment. Conversely, education raises incomes and promotes growth because it helps to unleash the productive potential of the poor.
What is key to getting the skills needed for high demand jobs?
Ground Truth Answers: access to educationEducationeducation
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What do people with lower income have less access to?
Ground Truth Answers: optional educationeducationeducation
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What does less education lead to when working?
Ground Truth Answers: lower wageslower wageslower wages
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Who has limited productive potential when faced with less access to education?
Ground Truth Answers: poorpoorpoor
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What are those with lower incomes less likely to have in order to prepare for the future?
Ground Truth Answers: savings and investmenteducation,education
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What is an important factor contributing to inequality for individuals?
Ground Truth Answers: access to educationaccess to educationaccess to education
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What does education in an area where there is high demand for workers tend to create?
Ground Truth Answers: high wageshigh wageshigh wages
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What type of wages do people unable to afford an education receive?
Ground Truth Answers: lowerlower wageslower wages
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What does lack of education lead directly to?
Ground Truth Answers: lower incomeslower incomeslower incomes
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What helps to unleash the productivity ability of the poor?
Ground Truth Answers: educationeducationeducation
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In 2014, economists with the Standard & Poor's rating agency concluded that the widening disparity between the U.S.'s wealthiest citizens and the rest of the nation had slowed its recovery from the 2008-2009 recession and made it more prone to boom-and-bust cycles. To partially remedy the wealth gap and the resulting slow growth, S&P recommended increasing access to education. It estimated that if the average United States worker had completed just one more year of school, it would add an additional $105 billion in growth to the country's economy over five years.
What did Standard & Poor recommend to speed economy recovery?
Ground Truth Answers: increasing access to educationincreasing access to educationincreasing access to education
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How much potential economic growth could the United States amass if everyone went through more schooling?
Ground Truth Answers: $105 billion$105 billion$105 billion
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What is the United States at risk for because of the recession of 2008?
Ground Truth Answers: boom-and-bust cyclesboom-and-bust cyclesboom-and-bust cycles
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Who concluded that the rising income inequality gap was not getting better?
Ground Truth Answers: Standard & PoorStandard & Pooreconomists with the Standard & Poor's rating agency
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When did economists reach a conclusion with the S&P's rating agency?
Ground Truth Answers: 201420142014
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When the recovery between the widening gap between the richest citizens and rest of the nation slow?
Ground Truth Answers: 2008-20092008-2009
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What did S&P recommend to somewhat remedy the wealth gap?
Ground Truth Answers: increasing access to educationincreasing access to educationincreasing access to education
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If the average U.S. worker were to complete an additional year of school, what amount of growth would be generated over 5 years?
Ground Truth Answers: $105 billion$105 billion$105 billion
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What does wealth disparity make the economy more prone to?
Ground Truth Answers: boom-and-bust cyclesboom-and-bust cyclesboom-and-bust cycles
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During the mass high school education movement from 1910–1940, there was an increase in skilled workers, which led to a decrease in the price of skilled labor. High school education during the period was designed to equip students with necessary skill sets to be able to perform at work. In fact, it differs from the present high school education, which is regarded as a stepping-stone to acquire college and advanced degrees. This decrease in wages caused a period of compression and decreased inequality between skilled and unskilled workers. Education is very important for the growth of the economy, however educational inequality in gender also influence towards the economy. Lagerlof and Galor stated that gender inequality in education can result to low economic growth, and continued gender inequality in education, thus creating a poverty trap. It is suggested that a large gap in male and female education may indicate backwardness and so may be associated with lower economic growth, which can explain why there is economic inequality between countries.
When did the high school education movement occur?
Ground Truth Answers: 1910–19401910–19401910–1940
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What impact did the high school education movement have on the presence of skilled workers?
Ground Truth Answers: increasean increaseincrease
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What impact did the high school education movement have on the wages of skilled workers?
Ground Truth Answers: decreasedecrease in the price of skilled labordecrease
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What impacts gender inequality in wages?
Ground Truth Answers: gender inequality in educationgender inequality in educationeducation
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What contributed to the decreased inequality between trained and untrained workers?
Ground Truth Answers: period of compressiondecrease in wagesdecrease in wages
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When was the mass high school education movement?
Ground Truth Answers: from 1910–19401910–19401910–1940
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What did the increase in skilled workers lead to?
Ground Truth Answers: a decrease in the price of skilled labordecrease in the price of skilled labordecrease in the price of skilled labor
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How did the education during the high school education movement differ from the subsequent high school education?
Ground Truth Answers: designed to equip students with necessary skill sets to be able to perform at workdesigned to equip students with necessary skill sets to be able to perform at workdesigned to equip students with necessary skill sets to be able to perform at work
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What is very important for the growth of the economy?
Ground Truth Answers: EducationEducationEducation
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What can result in creating a poverty trap?
Ground Truth Answers: gender inequality in educationlow economic growthcontinued gender inequality in education
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John Schmitt and Ben Zipperer (2006) of the CEPR point to economic liberalism and the reduction of business regulation along with the decline of union membership as one of the causes of economic inequality. In an analysis of the effects of intensive Anglo-American liberal policies in comparison to continental European liberalism, where unions have remained strong, they concluded "The U.S. economic and social model is associated with substantial levels of social exclusion, including high levels of income inequality, high relative and absolute poverty rates, poor and unequal educational outcomes, poor health outcomes, and high rates of crime and incarceration. At the same time, the available evidence provides little support for the view that U.S.-style labor-market flexibility dramatically improves labor-market outcomes. Despite popular prejudices to the contrary, the U.S. economy consistently affords a lower level of economic mobility than all the continental European countries for which data is available."
What types of organizations are on a decline in the US which adversely effects economic mobility?
Ground Truth Answers: unionsunion membershipunions
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Which set of countries have higher economic mobility than the United States?
Ground Truth Answers: continental European countriescontinental European countriescontinental European
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How much support is there for the US approach to economic development?
Ground Truth Answers: littlelittle supportlittle
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Under which policy are labor unions encouraged?
Ground Truth Answers: continental European liberalismEuropean liberalismcontinental European liberalism
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What is economic liberalism one of the causes of?
Ground Truth Answers: economic inequalityeconomic inequalityeconomic inequality
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What does the U.S. economic and social model have substantial levels of?
Ground Truth Answers: social exclusionsocial exclusionsocial exclusion
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What organization is John Schmitt and Ben Zipperer members of?
Ground Truth Answers: CEPRCEPRCEPR
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How much support does evidence provide for the view that labor-market flexibility improves labor-market outcomes?
Ground Truth Answers: littlelittle supportlittle
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What level of economic mobility does the U.S. economy have compared to European countries?
Ground Truth Answers: lowerlower levellower
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Sociologist Jake Rosenfield of the University of Washington asserts that the decline of organized labor in the United States has played a more significant role in expanding the income gap than technological changes and globalization, which were also experienced by other industrialized nations that didn't experience steep surges in inequality. He points out that nations with high rates of unionization, particularly in Scandinavia, have very low levels of inequality, and concludes "the historical pattern is clear; the cross-national pattern is clear: high inequality goes hand-in-hand with weak labor movements and vice-versa."
What country has low income inequality and high presence of unions?
Ground Truth Answers: ScandinaviaScandinaviaScandinavia
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What do weak labor movement correlate with?
Ground Truth Answers: high inequalityhigh inequalityhigh inequality
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What has had a negative impact on the labor markets in the US?
Ground Truth Answers: decline of organized labordecline of organized labordecline of organized labor
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What has presented problems to the US economy more than other nations?
Ground Truth Answers: technological changes and globalizationdecline of organized labortechnological changes and globalization
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What is the profession of Jake Rosenfield?
Ground Truth Answers: SociologistSociologistSociologist
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What college is Jake Rosenfield associated with?
Ground Truth Answers: University of WashingtonUniversity of WashingtonUniversity of Washington
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What does Rosenfield feel plays the most significant role in expanding the income gap?
Ground Truth Answers: decline of organized labordecline of organized labordecline of organized labor
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What rate of unionization do Scandinavian nations have?
Ground Truth Answers: highhigh rateshigh
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What does high inequality go hand-in-hand with?
Ground Truth Answers: weak labor movementsweak labor movementsweak labor movements
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Trade liberalization may shift economic inequality from a global to a domestic scale. When rich countries trade with poor countries, the low-skilled workers in the rich countries may see reduced wages as a result of the competition, while low-skilled workers in the poor countries may see increased wages. Trade economist Paul Krugman estimates that trade liberalisation has had a measurable effect on the rising inequality in the United States. He attributes this trend to increased trade with poor countries and the fragmentation of the means of production, resulting in low skilled jobs becoming more tradeable. However, he concedes that the effect of trade on inequality in America is minor when compared to other causes, such as technological innovation, a view shared by other experts. Empirical economists Max Roser and Jesus Crespo-Cuaresma find support in the data that international trade is increasing income inequality. They empirically confirm the predictions of the Stolper–Samuelson theorem regarding the effects of international trade on the distribution of incomes. Lawrence Katz estimates that trade has only accounted for 5-15% of rising income inequality. Robert Lawrence argues that technological innovation and automation has meant that low-skilled jobs have been replaced by machine labor in wealthier nations, and that wealthier countries no longer have significant numbers of low-skilled manufacturing workers that could be affected by competition from poor countries.
What effect does trade with poorer countries have on the workers in richer countries?
Ground Truth Answers: reduced wagesreduced wagesreduced wages
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What effect does trade with richer countries have on the workers in poorer countries?
Ground Truth Answers: increased wagesincreased wagesincreased wages
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What has a bigger impact on the United States' economy more than trade?
Ground Truth Answers: technological innovationtechnological innovationtechnological innovation
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What has replaced lower skilled workers in the United States?
Ground Truth Answers: machine labormachine labormachine labor
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What scale does trade liberalization shift economic inequality from?
Ground Truth Answers: globalglobalglobal
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When rich countries trade with poor countries, whose wages increase?
Ground Truth Answers: workers in the poor countrieslow-skilled workers in the poor countriespoor
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What does Paul Krugmen think has had an observable effect on inequality in the U.S.?
Ground Truth Answers: trade liberalisationtrade liberalisationtrade liberalisation
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Compared to other causes, the effect of trade on inequality in America is what?
Ground Truth Answers: minorminorminor
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What has technological innovation and automation replaced low-skilled jobs with?
Ground Truth Answers: machine labormachine labormachine labor
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In many countries, there is a Gender pay gap in favor of males in the labor market. Several factors other than discrimination may contribute to this gap. On average, women are more likely than men to consider factors other than pay when looking for work, and may be less willing to travel or relocate. Thomas Sowell, in his book Knowledge and Decisions, claims that this difference is due to women not taking jobs due to marriage or pregnancy, but income studies show that that does not explain the entire difference. A U.S. Census's report stated that in US once other factors are accounted for there is still a difference in earnings between women and men. The income gap in other countries ranges from 53% in Botswana to -40% in Bahrain.
What is the income inequality gap between genders in Botswana?
Ground Truth Answers: 53%53%53%
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What is the gender income inequality in Bahrain?
Ground Truth Answers: -40%-40%-40%
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What is attributed to the income inequality in the United States?
Ground Truth Answers: less willing to travel or relocatewomen not taking jobs due to marriage or pregnancynot taking jobs due to marriage or pregnancy
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Who does the wage gap between genders provide an advantage?
Ground Truth Answers: malesmalesmales
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In many countries, what kind of pay gap is there?
Ground Truth Answers: Genderranges from 53% in Botswana to -40% in BahrainGender
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Who does a gender pay gap tend to favor?
Ground Truth Answers: males in the labor marketmalesmales
Prediction:
What gender is less willing to travel or relocate for work?
Ground Truth Answers: womenwomenwomen
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Who is the author of the book, "Knowledge and Decisions"?
Ground Truth Answers: Thomas SowellThomas SowellThomas Sowell
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What does a U.S. census report state that even after other factors there still exists this between earnings of men and women?
Ground Truth Answers: a differencedifferencedifference in earnings
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Economist Simon Kuznets argued that levels of economic inequality are in large part the result of stages of development. According to Kuznets, countries with low levels of development have relatively equal distributions of wealth. As a country develops, it acquires more capital, which leads to the owners of this capital having more wealth and income and introducing inequality. Eventually, through various possible redistribution mechanisms such as social welfare programs, more developed countries move back to lower levels of inequality.
What types of programs help to redistribute wealth?
Ground Truth Answers: social welfaresocial welfaresocial welfare
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What is the level of inequality in underdeveloped countries?
Ground Truth Answers: relatively equalrelatively equal distributions of wealthlow
Prediction:
What introduces inequality to a country?
Ground Truth Answers: more capitalmore capitalmore capital
Prediction:
What leads to lower income inequality?
Ground Truth Answers: redistribution mechanismsredistribution mechanisms such as social welfare programsredistribution mechanisms
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What profession does Simon Kuznets have?
Ground Truth Answers: EconomistEconomistEconomist
Prediction:
What did Kuznets argue resulted from stages of development?
Ground Truth Answers: levels of economic inequalityeconomic inequalityeconomic inequality
Prediction:
What does a country acquire as it develops?
Ground Truth Answers: more capitalmore capitalmore capital
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What do the owners of more capital end up having?
Ground Truth Answers: more wealthmore wealth and incomewealth and income
Prediction:
What do redistribution mechanisms lead to?
Ground Truth Answers: lower levels of inequalitylower levels of inequalitylower levels of inequality
Prediction:
Plotting the relationship between level of income and inequality, Kuznets saw middle-income developing economies level of inequality bulging out to form what is now known as the Kuznets curve. Kuznets demonstrated this relationship using cross-sectional data. However, more recent testing of this theory with superior panel data has shown it to be very weak. Kuznets' curve predicts that income inequality will eventually decrease given time. As an example, income inequality did fall in the United States during its High school movement from 1910 to 1940 and thereafter.[citation needed] However, recent data shows that the level of income inequality began to rise after the 1970s. This does not necessarily disprove Kuznets' theory.[citation needed] It may be possible that another Kuznets' cycle is occurring, specifically the move from the manufacturing sector to the service sector.[citation needed] This implies that it may be possible for multiple Kuznets' cycles to be in effect at any given time.
During what time period did income inequality decrease in the United States?
Ground Truth Answers: 1910 to 19401910 to 19401910 to 1940
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When did income inequality begin to increase in the US?
Ground Truth Answers: 1970s1970s1970s
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In what sector are jobs beginning to increase?
Ground Truth Answers: serviceservice
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In what sector are jobs beginning to decrease?
Ground Truth Answers: manufacturingmanufacturing
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Who plotted the relationships between levels of income and inequality?
Ground Truth Answers: KuznetsKuznetsKuznets
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What is a a developing economy's level of inequality bulging out called?
Ground Truth Answers: Kuznets curveKuznets curveKuznets curve
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What has recent testing of Kuznets theory with superior data show it to be?
Ground Truth Answers: very weakvery weakvery weak
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What does Kuznets' curve predict about income inequality given time?
Ground Truth Answers: eventually decreaseeventually decreasedecrease
Prediction:
What may be possible for multiple Kuznets' cycles to be in at any given time?
Ground Truth Answers: effectin effecteffect
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Wealth concentration is a theoretical[according to whom?] process by which, under certain conditions, newly created wealth concentrates in the possession of already-wealthy individuals or entities. According to this theory, those who already hold wealth have the means to invest in new sources of creating wealth or to otherwise leverage the accumulation of wealth, thus are the beneficiaries of the new wealth. Over time, wealth condensation can significantly contribute to the persistence of inequality within society. Thomas Piketty in his book Capital in the Twenty-First Century argues that the fundamental force for divergence is the usually greater return of capital (r) than economic growth (g), and that larger fortunes generate higher returns [pp. 384 Table 12.2, U.S. university endowment size vs. real annual rate of return]
What process attributes new wealth to those that already have it?
Ground Truth Answers: Wealth concentrationWealth concentrationWealth concentration
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According to the wealth concentration theory, what advantage do the wealthy have in accumulating new wealth?
Ground Truth Answers: means to investthe means to invest in new sources of creating wealth or to otherwise leverage the accumulation of wealthmeans to invest in new sources of creating wealth
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What has the highest impact on wealth accumulation and the resulting income inequality?
Ground Truth Answers: greater return of capitalwealth condensationwealth condensation
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What tends to lead to more money?
Ground Truth Answers: larger fortuneswealth condensationwealth
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Where does newly created wealth concentrate?
Ground Truth Answers: the possession of already-wealthy individualsin the possession of already-wealthy individuals or entitiesalready-wealthy individuals
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Who is best able to leverage the accumulation of wealth?
Ground Truth Answers: those who already hold wealththose who already hold wealththose who already hold wealth
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What can significantly contribute to the continuing inequality in a society over time?
Ground Truth Answers: wealth condensationwealth condensationwealth condensation
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Who wrote the book "Capital in the Twenty-First Century"?
Ground Truth Answers: Thomas PikettyThomas PikettyThomas Piketty
Prediction:
What do larger fortunes generate?
Ground Truth Answers: higher returnshigher returnshigher returns
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Economist Joseph Stiglitz argues that rather than explaining concentrations of wealth and income, market forces should serve as a brake on such concentration, which may better be explained by the non-market force known as "rent-seeking". While the market will bid up compensation for rare and desired skills to reward wealth creation, greater productivity, etc., it will also prevent successful entrepreneurs from earning excess profits by fostering competition to cut prices, profits and large compensation. A better explainer of growing inequality, according to Stiglitz, is the use of political power generated by wealth by certain groups to shape government policies financially beneficial to them. This process, known to economists as rent-seeking, brings income not from creation of wealth but from "grabbing a larger share of the wealth that would otherwise have been produced without their effort"
What forces should serve as a brake on wealth concentration?
Ground Truth Answers: marketmarket forcesmarket
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What career does Joseph Stiglitz have?
Ground Truth Answers: EconomistEconomistEconomist
Prediction:
What type of skills does the market bid up compensation for?
Ground Truth Answers: rare and desiredrare and desired skillsrare and desired skills
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What is used by certain wealthy groups to obtain policies financially beneficial for them?
Ground Truth Answers: political power generated by wealthpolitical powerpolitical power
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Income not from the creation of wealth but by grabbing a larger share of it is know to economists by what term?
Ground Truth Answers: rent-seekingrent-seeking
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Effects of inequality researchers have found include higher rates of health and social problems, and lower rates of social goods, a lower level of economic utility in society from resources devoted on high-end consumption, and even a lower level of economic growth when human capital is neglected for high-end consumption. For the top 21 industrialised countries, counting each person equally, life expectancy is lower in more unequal countries (r = -.907). A similar relationship exists among US states (r = -.620).
Higher rates of health and social problems are just two of examples of effects from what?
Ground Truth Answers: inequalityinequalityinequality
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Why does a lower level of economic growth occur due to high-end consumption?
Ground Truth Answers: human capital is neglecteda lower level of economic utility in societyhuman capital is neglected
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What is lower in countries with more inequality for the top 21 industrialized countries?
Ground Truth Answers: life expectancylife expectancylife expectancy
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What is a lower rate of social goods an effect of?
Ground Truth Answers: inequalityinequalityinequality
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In U.S. states, what happens to the life expectancy in less economically equal ones?
Ground Truth Answers: life expectancy is lowerlife expectancy is lowerlower
Prediction:
2013 Economics Nobel prize winner Robert J. Shiller said that rising inequality in the United States and elsewhere is the most important problem. Increasing inequality harms economic growth. High and persistent unemployment, in which inequality increases, has a negative effect on subsequent long-run economic growth. Unemployment can harm growth not only because it is a waste of resources, but also because it generates redistributive pressures and subsequent distortions, drives people to poverty, constrains liquidity limiting labor mobility, and erodes self-esteem promoting social dislocation, unrest and conflict. Policies aiming at controlling unemployment and in particular at reducing its inequality-associated effects support economic growth.
What year did Robert J. Shiller win an Economics Nobel prize?
Ground Truth Answers: 201320132013
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What is the most important problem in the United States and elsewhere?
Ground Truth Answers: rising inequalityrising inequalityrising inequality
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Persistent unemployment has what effect on long-term economic growth?
Ground Truth Answers: negativenegative effectnegative
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What's one factor in eroding self-esteem?
Ground Truth Answers: UnemploymentUnemploymentUnemployment
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Policies which reduce the inequality associated effects of unemployment support what type of growth?
Ground Truth Answers: economiceconomiceconomic
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British researchers Richard G. Wilkinson and Kate Pickett have found higher rates of health and social problems (obesity, mental illness, homicides, teenage births, incarceration, child conflict, drug use), and lower rates of social goods (life expectancy by country, educational performance, trust among strangers, women's status, social mobility, even numbers of patents issued) in countries and states with higher inequality. Using statistics from 23 developed countries and the 50 states of the US, they found social/health problems lower in countries like Japan and Finland and states like Utah and New Hampshire with high levels of equality, than in countries (US and UK) and states (Mississippi and New York) with large differences in household income.
What nationality are researchers Richard G. Wilkinson and Kate Pickett?
Ground Truth Answers: BritishBritishBritish
Prediction:
What rates of health and social problems are in countries with high inequality?
Ground Truth Answers: higherhigher rateshigher
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How are the rates of social goods in countries with higher inequality?
Ground Truth Answers: lowerlower rateslower
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How many developed countries did British researchers use to gather statistics from?
Ground Truth Answers: 232323
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Health problems were lower in places with higher levels of what?
Ground Truth Answers: equalityequalityequality
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For most of human history higher material living standards – full stomachs, access to clean water and warmth from fuel – led to better health and longer lives. This pattern of higher incomes-longer lives still holds among poorer countries, where life expectancy increases rapidly as per capita income increases, but in recent decades it has slowed down among middle income countries and plateaued among the richest thirty or so countries in the world. Americans live no longer on average (about 77 years in 2004) than Greeks (78 years) or New Zealanders (78), though the USA has a higher GDP per capita. Life expectancy in Sweden (80 years) and Japan (82) – where income was more equally distributed – was longer.
What did higher material living standards lead to for most of human history?
Ground Truth Answers: better health and longer livesbetter health and longer livesbetter health and longer lives
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Where does the pattern of higher income-longer lives still hold true?
Ground Truth Answers: poorer countriespoorer countriespoorer countries
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What increases rapidly as per capita income increases?
Ground Truth Answers: life expectancylife expectancylife expectancy
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Who lives no longer on average than Greeks and New Zealanders?
Ground Truth Answers: AmericansAmericansAmericans
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How are incomes distributed in Sweden?
Ground Truth Answers: more equallymore equallymore equally distributed
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In recent years the characteristic that has strongly correlated with health in developed countries is income inequality. Creating an index of "Health and Social Problems" from nine factors, authors Richard Wilkinson and Kate Pickett found health and social problems "more common in countries with bigger income inequalities", and more common among states in the US with larger income inequalities. Other studies have confirmed this relationship. The UNICEF index of "child well-being in rich countries", studying 40 indicators in 22 countries, correlates with greater equality but not per capita income.
What characteristic in recent years has been strongly tied with health in developed countries?
Ground Truth Answers: income inequalityincome inequalityincome inequality
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Who created an index of health and social problems?
Ground Truth Answers: authors Richard Wilkinson and Kate PickettRichard Wilkinson and Kate PickettRichard Wilkinson and Kate Pickett
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How many factors of health and social problems did Wilkinson and PIckett identify?
Ground Truth Answers: ninenine factorsnine
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Where are health and social problems most common?
Ground Truth Answers: among states in the US with larger income inequalitiescountries with bigger income inequalitiescountries with bigger income inequalities
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What does child well-being in rich countries correlate most to?
Ground Truth Answers: greater equalitygreater equalitygreater equality but not per capita income
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Crime rate has also been shown to be correlated with inequality in society. Most studies looking into the relationship have concentrated on homicides – since homicides are almost identically defined across all nations and jurisdictions. There have been over fifty studies showing tendencies for violence to be more common in societies where income differences are larger. Research has been conducted comparing developed countries with undeveloped countries, as well as studying areas within countries. Daly et al. 2001 found that among U.S States and Canadian Provinces there is a tenfold difference in homicide rates related to inequality. They estimated that about half of all variation in homicide rates can be accounted for by differences in the amount of inequality in each province or state. Fajnzylber et al. (2002) found a similar relationship worldwide. Among comments in academic literature on the relationship between homicides and inequality are:
What has crime rate been show to be correlated with in a society?
Ground Truth Answers: inequalityinequalityinequality
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What is almost identical across all nations and jurisdictions?
Ground Truth Answers: homicideshomicides
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Over how many studies have shown that violence is more common in societies with income differences?
Ground Truth Answers: fiftyover fiftyfifty
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What is it estimated that about half of all variation in homicide rates can be accounted for by?
Ground Truth Answers: differences in the amount of inequalitydifferences in the amount of inequalityinequality
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How much of a difference in homicide rates are related to inequality?
Ground Truth Answers: tenfoldtenfoldtenfold
Prediction:
Following the utilitarian principle of seeking the greatest good for the greatest number – economic inequality is problematic. A house that provides less utility to a millionaire as a summer home than it would to a homeless family of five, is an example of reduced "distributive efficiency" within society, that decreases marginal utility of wealth and thus the sum total of personal utility. An additional dollar spent by a poor person will go to things providing a great deal of utility to that person, such as basic necessities like food, water, and healthcare; while, an additional dollar spent by a much richer person will very likely go to luxury items providing relatively less utility to that person. Thus, the marginal utility of wealth per person ("the additional dollar") decreases as a person becomes richer. From this standpoint, for any given amount of wealth in society, a society with more equality will have higher aggregate utility. Some studies have found evidence for this theory, noting that in societies where inequality is lower, population-wide satisfaction and happiness tend to be higher.What does the utilitarian principle seek for the greatest number of people?
Ground Truth Answers: the greatest goodgreatest goodgood
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An adobe that provides less utility to one person than another is an example of reduced what?
Ground Truth Answers: distributive efficiencydistributive efficiency"distributive efficiency"
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A dollar spent by a poor person is likely to provide what for them?
Ground Truth Answers: a great deal of utilitya great deal of utilitybasic necessities
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What the marginal utility of wealth per income per person do as that person becomes richer?
Ground Truth Answers: decreasesdecreasesdecreases
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What will a society with more equality have?
Ground Truth Answers: higher aggregate utilitypopulation-wide satisfaction and happinesssatisfaction and happiness
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Conservative researchers have argued that income inequality is not significant because consumption, rather than income should be the measure of inequality, and inequality of consumption is less extreme than inequality of income in the US. Will Wilkinson of the libertarian Cato Institute states that "the weight of the evidence shows that the run-up in consumption inequality has been considerably less dramatic than the rise in income inequality," and consumption is more important than income. According to Johnson, Smeeding, and Tory, consumption inequality was actually lower in 2001 than it was in 1986. The debate is summarized in "The Hidden Prosperity of the Poor" by journalist Thomas B. Edsall. Other studies have not found consumption inequality less dramatic than household income inequality, and the CBO's study found consumption data not "adequately" capturing "consumption by high-income households" as it does their income, though it did agree that household consumption numbers show more equal distribution than household income.
What do conservative researchers fell should be a measure of inequality?
Ground Truth Answers: consumptionconsumptionconsumption
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What political leaning does the Cato Institute have?
Ground Truth Answers: libertarianlibertarianlibertarian
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When was consumption inequality lower than it had been in 1986?
Ground Truth Answers: 200120012001
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Who wrote "The Hidden Prosperity of the Poor"?
Ground Truth Answers: Thomas B. EdsallThomas B. EdsallThomas B. Edsall
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What is Thomas B. Edsall's profession?
Ground Truth Answers: journalistjournalistjournalist
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Central Banking economist Raghuram Rajan argues that "systematic economic inequalities, within the United States and around the world, have created deep financial 'fault lines' that have made [financial] crises more likely to happen than in the past" – the Financial crisis of 2007–08 being the most recent example. To compensate for stagnating and declining purchasing power, political pressure has developed to extend easier credit to the lower and middle income earners – particularly to buy homes – and easier credit in general to keep unemployment rates low. This has given the American economy a tendency to go "from bubble to bubble" fueled by unsustainable monetary stimulation.
What is Raghuram Rajan's career?
Ground Truth Answers: economisteconomisteconomist
Prediction:
What does Rajan feel has created deep financial fault lines?
Ground Truth Answers: systematic economic inequalitiessystematic economic inequalitiessystematic economic inequalities
Prediction:
What is the most recent example of financial fault lines?
Ground Truth Answers: the Financial crisis of 2007–08Financial crisis of 2007–08Financial crisis of 2007–08
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What does political pressure push to extend to compensate for stagnating purchasing power?
Ground Truth Answers: easier crediteasier credit to the lower and middle income earnerseasier credit to the lower and middle income earners
Prediction:
What has given the American economy a tendency to go "from bubble to bubble"?
Ground Truth Answers: easier crediteasier crediteasier credit
Prediction:
According to International Monetary Fund economists, inequality in wealth and income is negatively correlated with the duration of economic growth spells (not the rate of growth). High levels of inequality prevent not just economic prosperity, but also the quality of a country's institutions and high levels of education. According to IMF staff economists, "if the income share of the top 20 percent (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down. In contrast, an increase in the income share of the bottom 20 percent (the poor) is associated with higher GDP growth. The poor and the middle class matter the most for growth via a number of interrelated economic, social, and political channels."
What is negatively correlated to the duration of economic growth?
Ground Truth Answers: inequality in wealth and incomeinequality in wealth and incomewealth and income
Prediction:
What do high levels of inequality prevent beyond economic prosperity?
Ground Truth Answers: quality of a country's institutionsquality of a country's institutions and high levels of educationquality of a country's institutions and high levels of education
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What happens to the GDP growth of a country if the income share of the top 20 percent increases, according to IMF staff economists?
Ground Truth Answers: declinesdeclinesdeclines
Prediction:
What does an increase in the income share of the bottom 20 percent of people of a society result in?
Ground Truth Answers: higher GDP growthhigher GDP growthhigher GDP growth
Prediction:
Who matters the most for economic growth?
Ground Truth Answers: The poor and the middle classThe poor and the middle classpoor and the middle class
Prediction:
According to economists David Castells-Quintana and Vicente Royuela, increasing inequality harms economic growth. High and persistent unemployment, in which inequality increases, has a negative effect on subsequent long-run economic growth. Unemployment can harm growth not only because it is a waste of resources, but also because it generates redistributive pressures and subsequent distortions, drives people to poverty, constrains liquidity limiting labor mobility, and erodes self-esteem promoting social dislocation, unrest and conflict. Policies aiming at controlling unemployment and in particular at reducing its inequality-associated effects support economic growth.
What do David Castlles-Quintana and Vicente Royuela do for a living?
Ground Truth Answers: economistseconomistseconomists
Prediction:
What does increasing inequality harm?
Ground Truth Answers: economic growtheconomic growtheconomic growth
Prediction:
What was persistent unemployment have a negative effect on?
Ground Truth Answers: subsequent long-run economic growthsubsequent long-run economic growthlong-run economic growth
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Why does unemployment harm growth?
Ground Truth Answers: because it is a waste of resourceswaste of resourceswaste of resources
Prediction:
Policies which try to control unemployment support economic growth because they reduce what?
Ground Truth Answers: inequality-associated effectsinequality-associated effectsinequality
Prediction:
Economist Joseph Stiglitz presented evidence in 2009 that both global inequality and inequality within countries prevent growth by limiting aggregate demand. Economist Branko Milanovic, wrote in 2001 that, "The view that income inequality harms growth – or that improved equality can help sustain growth – has become more widely held in recent years. ... The main reason for this shift is the increasing importance of human capital in development. When physical capital mattered most, savings and investments were key. Then it was important to have a large contingent of rich people who could save a greater proportion of their income than the poor and invest it in physical capital. But now that human capital is scarcer than machines, widespread education has become the secret to growth."
What did Stiglitz present in 2009 regarding global inequality?
Ground Truth Answers: evidenceevidenceprevent growth
Prediction:
How does inequality prevent growth?
Ground Truth Answers: by limiting aggregate demandlimiting aggregate demandlimiting aggregate demand
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What are both Branko Milanovic and Joseph Stiglitz?
Ground Truth Answers: EconomistEconomistEconomist
Prediction:
What has been the main reason for the shift to the view that income inequality harms growth?
Ground Truth Answers: increasing importance of human capital in developmentincreasing importance of human capital in developmentincreasing importance of human capital
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What has become the secret to economic growth?
Ground Truth Answers: widespread educationwidespread educationwidespread education
Prediction:
In 1993, Galor and Zeira showed that inequality in the presence of credit market imperfections has a long lasting detrimental effect on human capital formation and economic development. A 1996 study by Perotti examined the channels through which inequality may affect economic growth. He showed that, in accordance with the credit market imperfection approach, inequality is associated with lower level of human capital formation (education, experience, and apprenticeship) and higher level of fertility, and thereby lower levels of growth. He found that inequality is associated with higher levels of redistributive taxation, which is associated with lower levels of growth from reductions in private savings and investment. Perotti concluded that, "more equal societies have lower fertility rates and higher rates of investment in education. Both are reflected in higher rates of growth. Also, very unequal societies tend to be politically and socially unstable, which is reflected in lower rates of investment and therefore growth."
When did Galor and Zeria show new information about inequality?
Ground Truth Answers: 199319931993
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Inequality in the presence of credit market imperfections has what kind of effect on human capital formation?
Ground Truth Answers: detrimentallong lasting detrimental effectlong lasting detrimental
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What did a 1996 study by Perotti examine?
Ground Truth Answers: channels through which inequality may affect economic growthchannels through which inequality may affect economic growthchannels through which inequality may affect economic growth
Prediction:
What is inequality associated with higher levels of?
Ground Truth Answers: redistributive taxationfertilityfertility
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What do extremely unequal societies tend to be?
Ground Truth Answers: politically and socially unstablepolitically and socially unstablepolitically and socially unstable
Prediction:
Research by Harvard economist Robert Barro, found that there is "little overall relation between income inequality and rates of growth and investment". According to work by Barro in 1999 and 2000, high levels of inequality reduce growth in relatively poor countries but encourage growth in richer countries. A study of Swedish counties between 1960 and 2000 found a positive impact of inequality on growth with lead times of five years or less, but no correlation after ten years. Studies of larger data sets have found no correlations for any fixed lead time, and a negative impact on the duration of growth.
What does high levels of inequality do to growth in poor countries?
Ground Truth Answers: reducereduce growthreduce
Prediction:
What does high levels of inequality do for economic growth in richer countries?
Ground Truth Answers: encourageencourage growthencourage
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Barro found there is little relation between income inequality and rates of what?
Ground Truth Answers: growth and investmentgrowth and investmentgrowth and investment
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What institution does Robert Barro hail from?
Ground Truth Answers: HarvardHarvardHarvard
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When was a study conducted of Swedish counties?
Ground Truth Answers: between 1960 and 2000between 1960 and 2000between 1960 and 2000
Prediction:
Studies on income inequality and growth have sometimes found evidence confirming the Kuznets curve hypothesis, which states that with economic development, inequality first increases, then decreases. Economist Thomas Piketty challenges this notion, claiming that from 1914 to 1945 wars and "violent economic and political shocks" reduced inequality. Moreover, Piketty argues that the "magical" Kuznets curve hypothesis, with its emphasis on the balancing of economic growth in the long run, cannot account for the significant increase in economic inequality throughout the developed world since the 1970s.
What have studies on income inequality sometimes found evidence confirming?
Ground Truth Answers: Kuznets curve hypothesisKuznets curve hypothesisKuznets curve hypothesis
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The Kuznets curve says with economic development, inequality will decrease after what?
Ground Truth Answers: first increasesinequality first increasesincreases
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Who challenges the notion of the Kuznets curve hypothesis?
Ground Truth Answers: Thomas PikettyThomas PikettyThomas Piketty
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What's Thomas Piketty's job?
Ground Truth Answers: EconomistEconomistEconomist
Prediction:
What does Piketty feel was the biggest factors in reducing inequality between 1914 to 1945?
Ground Truth Answers: wars and "violent economic and political shocks"violent economic and political shockswars and "violent economic and political shocks"
Prediction:
Some theories developed in the 1970s established possible avenues through which inequality may have a positive effect on economic development. According to a 1955 review, savings by the wealthy, if these increase with inequality, were thought to offset reduced consumer demand. A 2013 report on Nigeria suggests that growth has risen with increased income inequality. Some theories popular from the 1950s to 2011 incorrectly stated that inequality had a positive effect on economic development. Analyses based on comparing yearly equality figures to yearly growth rates were misleading because it takes several years for effects to manifest as changes to economic growth. IMF economists found a strong association between lower levels of inequality in developing countries and sustained periods of economic growth. Developing countries with high inequality have "succeeded in initiating growth at high rates for a few years" but "longer growth spells are robustly associated with more equality in the income distribution."
When were theories developed suggesting inequality may have some positive effect on economic development?
Ground Truth Answers: the 1970s1970s1970s
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According to a 1955 review, what were savings by the wealthy thought to offset?
Ground Truth Answers: reduced consumer demandreduced consumer demandreduced consumer demand
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What does a 2013 report on Nigeria suggest it's growth has done?
Ground Truth Answers: risen with increased income inequalityrisenrisen
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How long does it take for the effects to manifest as changes to economic growth?
Ground Truth Answers: several yearsseveral yearsseveral years
Prediction:
What are longer growth spells associated with?
Ground Truth Answers: more equality in the income distributionmore equalityequality in the income distribution
Prediction:
While acknowledging the central role economic growth can potentially play in human development, poverty reduction and the achievement of the Millennium Development Goals, it is becoming widely understood amongst the development community that special efforts must be made to ensure poorer sections of society are able to participate in economic growth. The effect of economic growth on poverty reduction – the growth elasticity of poverty – can depend on the existing level of inequality. For instance, with low inequality a country with a growth rate of 2% per head and 40% of its population living in poverty, can halve poverty in ten years, but a country with high inequality would take nearly 60 years to achieve the same reduction. In the words of the Secretary General of the United Nations Ban Ki-Moon: "While economic growth is necessary, it is not sufficient for progress on reducing poverty."
What needs to be made to ensure poorer members of society can participate in economic growth?
Ground Truth Answers: special effortsspecial effortsspecial efforts
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What can the growth elasticity of poverty depend on?
Ground Truth Answers: existing level of inequalityexisting level of inequalityexisting level of inequality
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What does it take a country with high inequality longer to achieve?
Ground Truth Answers: reductionhalve povertyhalve poverty
Prediction:
What was Ban Ki-Moon the Secretary General of?
Ground Truth Answers: the United NationsUnited NationsUnited Nations
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What isn't economic growth sufficient for progress on?
Ground Truth Answers: reducing povertyreducing povertyreducing poverty
Prediction:
In many poor and developing countries much land and housing is held outside the formal or legal property ownership registration system. Much unregistered property is held in informal form through various associations and other arrangements. Reasons for extra-legal ownership include excessive bureaucratic red tape in buying property and building, In some countries it can take over 200 steps and up to 14 years to build on government land. Other causes of extra-legal property are failures to notarize transaction documents or having documents notarized but failing to have them recorded with the official agency.
What is held outside the formal legal ownership registration system in many developing countries?
Ground Truth Answers: much land and housingland and housingland and housing
Prediction:
How is unregistered property held in informal form?
Ground Truth Answers: through various associations and other arrangementsthrough various associations and other arrangementsthrough various associations
Prediction:
Excessive bureaucratic red tape is one of the reasons for what type of ownership?
Ground Truth Answers: extra-legalextra-legalextra-legal
Prediction:
In some countries over how many steps can it take to build on government land?
Ground Truth Answers: 200200200
Prediction:
What can it sometimes take up to 14 years to get permission to build on?
Ground Truth Answers: government landgovernment landgovernment land
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A number of researchers (David Rodda, Jacob Vigdor, and Janna Matlack), argue that a shortage of affordable housing – at least in the US – is caused in part by income inequality. David Rodda noted that from 1984 and 1991, the number of quality rental units decreased as the demand for higher quality housing increased (Rhoda 1994:148). Through gentrification of older neighbourhoods, for example, in East New York, rental prices increased rapidly as landlords found new residents willing to pay higher market rate for housing and left lower income families without rental units. The ad valorem property tax policy combined with rising prices made it difficult or impossible for low income residents to keep pace.
What do a number of researchers think a shortage of is caused in part by income inequality?
Ground Truth Answers: a shortage of affordable housingaffordable housingaffordable housing
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What decreased in number between 1984 and 1991?
Ground Truth Answers: quality rental unitsquality rental unitsquality rental units
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Why did the demand for rentals decrease?
Ground Truth Answers: demand for higher quality housing increaseddemand for higher quality housing increaseddemand for higher quality housing increased
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What drove increased rental prices in East New York?
Ground Truth Answers: residents willing to pay higher market rate for housinggentrification of older neighbourhoodsnew residents willing to pay higher market rate
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What combined with ricing prices to make it difficult or impossible for poor people to keep pace?
Ground Truth Answers: ad valorem property tax policyad valorem property tax policyproperty tax policy
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Firstly, certain costs are difficult to avoid and are shared by everyone, such as the costs of housing, pensions, education and health care. If the state does not provide these services, then for those on lower incomes, the costs must be borrowed and often those on lower incomes are those who are worse equipped to manage their finances. Secondly, aspirational consumption describes the process of middle income earners aspiring to achieve the standards of living enjoyed by their wealthier counterparts and one method of achieving this aspiration is by taking on debt. The result leads to even greater inequality and potential economic instability.
How are the certain costs which are difficult to avoid shared?
Ground Truth Answers: by everyoneby everyone
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What are those with lower incomes often unable to manage?
Ground Truth Answers: their financesfinancesfinances
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What is the term when middle income earners aspire to obtain the same standards of living as people wealthier than themselves?
Ground Truth Answers: aspirational consumptionaspirational consumptionaspirational consumption
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What is one method of achieving aspirational consumption?
Ground Truth Answers: taking on debttaking on debttaking on debt
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When people take on debt, it leads potentially to what?
Ground Truth Answers: economic instabilitygreater inequality and potential economic instabilitygreater inequality and potential economic instability
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The smaller the economic inequality, the more waste and pollution is created, resulting in many cases, in more environmental degradation. This can be explained by the fact that as the poor people in the society become more wealthy, it increases their yearly carbon emissions. This relation is expressed by the Environmental Kuznets Curve (EKC).[not in citation given] It should be noted here however that in certain cases, with great economic inequality, there is nonetheless not more waste and pollution created as the waste/pollution is cleaned up better afterwards (water treatment, filtering, ...).... Also note that the whole of the increase in environmental degradation is the result of the increase of emissions per person being multiplied by a multiplier. If there were fewer people however, this multiplier would be lower, and thus the amount of environmental degradation would be lower as well. As such, the current high level of population has a large impact on this as well. If (as WWF argued), population levels would start to drop to a sustainable level (1/3 of current levels, so about 2 billion people), human inequality can be addressed/corrected, while still not resulting in an increase of environmental damage.
When economic inequality is smaller, more waste and pollution is?
Ground Truth Answers: createdcreatedcreatedcreated
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What would be lower if there were fewer people?
Ground Truth Answers: emissions per personthis multiplierenvironmental degradationenvironmental degradation
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What does the current high level of population have a large impact on?
Ground Truth Answers: environmental degradationthis as wellenvironmental degradationenvironmental degradation
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How could human inequality be addressed without resulting in an increase of environmental damage?
Ground Truth Answers: If (as WWF argued), population levels would start to drop to a sustainable levelIf (as WWF argued), population levels would start to drop to a sustainable levelpopulation levels would start to drop to a sustainable levelpopulation levels would start to drop to a sustainable level
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Socialists attribute the vast disparities in wealth to the private ownership of the means of production by a class of owners, creating a situation where a small portion of the population lives off unearned property income by virtue of ownership titles in capital equipment, financial assets and corporate stock. By contrast, the vast majority of the population is dependent on income in the form of a wage or salary. In order to rectify this situation, socialists argue that the means of production should be socially owned so that income differentials would be reflective of individual contributions to the social product.
What is the vast disparities in wealth attributed to by Socialists?
Ground Truth Answers: private ownership of the means of productionprivate ownership of the means of productionprivate ownership of the means of production
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What does private ownership create a situation of?
Ground Truth Answers: a small portion of the population lives off unearned property incomesmall portion of the population lives off unearned property incomesmall portion of the population lives off unearned property income
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What type of income is the vast majority of the population dependent on?
Ground Truth Answers: wage or salarywage or salarywage or salary
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How do socialists think the means of production should be owned?
Ground Truth Answers: sociallysociallysocially
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What would income differentials be if individual contributions were relevant to the social product?
Ground Truth Answers: reflectivereflectivereflective of individual contributions
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Robert Nozick argued that government redistributes wealth by force (usually in the form of taxation), and that the ideal moral society would be one where all individuals are free from force. However, Nozick recognized that some modern economic inequalities were the result of forceful taking of property, and a certain amount of redistribution would be justified to compensate for this force but not because of the inequalities themselves. John Rawls argued in A Theory of Justice that inequalities in the distribution of wealth are only justified when they improve society as a whole, including the poorest members. Rawls does not discuss the full implications of his theory of justice. Some see Rawls's argument as a justification for capitalism since even the poorest members of society theoretically benefit from increased innovations under capitalism; others believe only a strong welfare state can satisfy Rawls's theory of justice.
Who argues that the government redistributes wealth by force?
Ground Truth Answers: Robert NozickRobert NozickRobert Nozick
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What is the usual form of the government's wealth redistribution?
Ground Truth Answers: taxationtaxationtaxation
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In an ideal moral society, what would all citizens be free from?
Ground Truth Answers: forceforce
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How were some modern economic inequalities created?
Ground Truth Answers: forceful taking of propertyforceful taking of propertyforceful taking of property
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When are inequalities in wealth justified, according to John Rawls?
Ground Truth Answers: when they improve society as a wholewhen they improve society as a wholewhen they improve society as a whole
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The capabilities approach – sometimes called the human development approach – looks at income inequality and poverty as form of “capability deprivation”. Unlike neoliberalism, which “defines well-being as utility maximization”, economic growth and income are considered a means to an end rather than the end itself. Its goal is to “wid[en] people’s choices and the level of their achieved well-being” through increasing functionings (the things a person values doing), capabilities (the freedom to enjoy functionings) and agency (the ability to pursue valued goals).
What does the capabilities approach look at poverty as a form of?
Ground Truth Answers: capability deprivationcapability deprivation“capability deprivation”
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In the capabilities approach, grow and income are considered a means to an end rather than what?
Ground Truth Answers: the end itselfthe end itselfthe end itself
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What is the goal of the capabilities approach?
Ground Truth Answers: to “wid[en] people’s choices and the level of their achieved well-being”wid[en] people’s choices and the level of their achieved well-being“wid[en] people’s choices and the level of their achieved well-being”
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How would the capabilities approach achieve it's goal?
Ground Truth Answers: through increasing functioningsincreasing functionings (the things a person values doing), capabilities (the freedom to enjoy functionings) and agency (the ability to pursue valued goals)through increasing functionings
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What is the definition of agency as it relates to capabilities?
Ground Truth Answers: the ability to pursue valued goalsthe ability to pursue valued goals
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When a person’s capabilities are lowered, they are in some way deprived of earning as much income as they would otherwise. An old, ill man cannot earn as much as a healthy young man; gender roles and customs may prevent a woman from receiving an education or working outside the home. There may be an epidemic that causes widespread panic, or there could be rampant violence in the area that prevents people from going to work for fear of their lives. As a result, income and economic inequality increases, and it becomes more difficult to reduce the gap without additional aid. To prevent such inequality, this approach believes it’s important to have political freedom, economic facilities, social opportunities, transparency guarantees, and protective security to ensure that people aren’t denied their functionings, capabilities, and agency and can thus work towards a better relevant income.
What happens when a person's capabilities aer lowered, as it relates to their income?
Ground Truth Answers: deprived of earning as muchdeprived of earning as much incomedeprived of earning as much income as they would otherwise
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What can and old, ill man not do?
Ground Truth Answers: earn as much as a healthy young manearn as much as a healthy young manearn as much as a healthy young man
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What issues may prevent women from working outside the home or receiving education?
Ground Truth Answers: gender roles and customsgender roles and customsgender roles and customs
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Why would rampant violence prevent people from going to work?
Ground Truth Answers: for fear of their livesfear of their livesfear of their lives
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What can people work towards if they aren't denied their functionings, capabilities and agency?
Ground Truth Answers: a better relevant income.better relevant incomea better relevant income
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