Kuznets' inverted-U hypothesis
A)implies that things must get worse before they get better.
B)suggests that inequality will worsen and then improve as a country grows.
C)suggests that inequality will improve and then worsen as a country grows.
D)points out six characteristics of modern economic growth.

Question

Quizplus · Accepted Answer

Kuznets' inverted-U hypothesis suggests that during the early stages of economic development, income inequality tends to worsen, but then improves as the country reaches a certain level of economic growth. The hypothesis is shown as an inverted U-shaped curve, implying that inequality first rises and then falls as per capita income increases.

Kuznets' Inverted-U Hypothesis