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Praxis II Middle School Content Knowledge Test Prep

Category - Praxis Middle School Content Knowledge Practice Test

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Is it possible for per capita income to go up while median income is going down?
  1. Yes, this is a sign of growing unemployment.
  2. Yes, this is a sign of growing inequality.
  3. No, when per capita income goes up median income must as well.
  4. Yes, these two measures are not related to each other.
Explanation
Answer: B - When per capita income goes up and median income goes down, you can conclude that inequality has increased. Consider the following example:

Ten people each make $50,000. If nine of those people find their salaries reduced to $25,000 but one person gets a raise to $500,000, the average income has gone from $50,000 to nearly $75,000 while the median has gone down from $50,000 to $25,000. Per capita income is the mean per person income in a population.
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