WBCS.LIVE practice question

The 'Kuznets Curve' suggests what kind of specific relationship between economic growth and income inequality?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. U-shaped relationship
  2. Linear proportional relationship
  3. Inverted U-shaped relationship
  4. No observable relationship

Correct answer and explanation

Correct answer: Inverted U-shaped relationship

Explanation: āœ… Correct Answer: C) Inverted U-shaped relationship šŸ“š Explanation: The Kuznets Curve, proposed by Simon Kuznets, hypothesis that as an economy strictly develops from a primarily agricultural society to an industrialized one, market forces first massively increase income inequality, and then eventually decrease it. This theoretical trajectory creates a distinct "inverted U-shape" when graphically plotted over a long period.