Because people’s income vary other the life cycle and because there are transitory shocks to people’s incomes the standard measures of income distribution ?

A. exaggerate the inequality of living standards
B. could exaggerate or understate the inequality of living standards depending on whether the transitory shocks are positive or negative
C. understate the inequality of living standards
D. accurately represent the true inequality of living standards

Correct Answer: exaggerate the inequality of living standards ✔

Last Updated: June 11, 2019