Question

18) is our economy primarily manufacturing service or agricultural? 19) what is a Lorenz curve? 20) what is a quin tile when referring to population and income distribution? 21) tariffs are a great way to punish china without causing harm to our own economy true or false? 22) explain your answer in question 21 23) resources are _____while human wants and needs are _______ 24) using the CIA website and world fact book answer the following questions: what is the GDP/capita for the united states and Bangladesh?

Answer 1

18) Indian economy was primarily an agriculture intensive economy. However, since year-by-year agriculture's contribution to our GDP has been declining, Indian economy moved from being an agriculture economy, to a service economy. According to the IMF data, in the financial year 2016-17, the service sector contributed over 50% to the GDP of the country, while agriculture was 17% and manufacturing around 30%.

19) Lorenz curve, as developed by economist Max Lorenz, is a curve representing the dispersion of income or income inequality. First developed in 1905, this cumulative curve measures the departure of actual distribution of income from the equal distribution of income where x-axis represents the population and y-axis represents the national income (Refer graphs). The population on the left side of x-axis is the poorest, and on the right side of x-axis is the richest.

Now, if there is no income inequality, the Lorenz curve is a 45 degree line (figure 1).

This is the perfect case representing equal distribution of income. The further away is the actual curve from perfect equality, i.e. the 45 degree line, the higher is the inequality of income in the country (figure 2).

20) (Refer to figure 3) A quin tile referring to population and income distribution is represented in the figure as quintile distribution of income inequality where 20% of the poorest population holds only 5% of the income.

21) FALSE

22) Tariffs are one way to protect our domestic industries from lower-priced Chinese products. However, imposing tariffs is not a solution to a healthy and sustainable economic growth. In other words, if we impose tariffs to punish China, we are in-turn punishing our own economy by harming it from the demand side.

Look at it this way, if we impose tariffs on Chinese exports, we are increasing the prices of imported goods. This is because the smart Chinese supplier is pushing the additional cost of tariffs on to the domestic buyer, and still maintaining a price edge. Suppose before tariffs prices of Chinese lights is 25 INR and domestic lights is 50 INR. After tariffs, the Chinese supplier increases the prices to 40 INR, which is still LESS than the price of domestic lights. So, in the end, it is the domestic customer that loses by paying more for the lights that costed much less to him before the tariff. Hence, FALSE, tariffs are not a great way to punish China without causing harm to our own economy.

23) Resources are limited, but human needs are unlimited.

-Lionel Robbins

24) Countries Years GDP per capita

US 2017 $59,800

Bangaldesh 2017 $4,200