Econometric studies show a hump-shaped relationship between income levels and pollution levels. Which of these statements reflects that relationship?
A) As an economy grows and income levels rise, initially pollution levels also rise.
B) Decreasing income levels lead to an increase in pollution levels.
C) As an economy grows, pollution levels show a constant increase.
D) Economies that are in turmoil reflect pollution levels that are diminishing.
E) Income levels do not have any correlation with pollution levels.

Question

Quizplus · Accepted Answer

The hump-shaped relationship is known as the Environmental Kuznets Curve, which suggests that as an economy grows, pollution levels initially increase, but after reaching a certain income level, pollution levels begin to decrease.

Econometric Studies Show a Hump-Shaped Relationship Between Income Levels and Pollution