According to the Organisation for Economic Co-operation and Development, income inequality is:

Question

BlackTom AI · Accepted Answer

To tackle the question, I’ll evaluate what the OECD typically means by income inequality and then apply that to each option.
Option 1: 'contributing to the increase in purchasing power of the middle class' — this statement describes a dynamic effect on purchasing power and implies a reduction in inequality, which is not a standard OECD definition of income inequality. The metric OECD uses is about the gap between high and low incomes, not a direct statement about middle-class purchasing power increasing.
Option 2: 'determined as the ratio between the average income of the richest 10% of the population to the poorest 10% of the population' — this aligns with a common measure of income inequality known as the top-to-bottom income ratio, which OECD often references when discussing inequality across populations. It captures the disparity between top and bottom deciles, matching the described concept.
Option 3: 'decreasing with globalization, skill-based technological change, and changes in countries\' policy approaches' — this statement makes a specific claim about the trend of inequality in relation to globalization, technological change, and policy, which is not a universal definition used by OECD. In fact, OECD reports show varied trends across countries and periods, not a single universal decrease linked to those factors.
In summary, Option 2 best reflects the OECD’s approach to defining income inequality as the ratio between the incomes of the richest and poorest portions of the population, which is a standard descriptive measure of inequality. The other options either describe effects or trends rather than the definitional measure themselves, or posit conclusions not universally asserted by OECD data.

FINA3401.13791.202610 Practice Quiz CH 4

According to the Organisation for Economic Co-operation and Development, income inequality is:

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