According to the Kuznets hypothesis, how does income inequality change as an economy develops?

Show Answers

It initially declines, then rises, and eventually stays at a high levelIt begins by rising, then falls, and finally remains lowIt starts by increasing, then levels off, before going up againIt first rises, then falls, followed by another rise and fall

Explanation

The Kuznets hypothesis proposes that inequality first decreases during early economic development, then increases as development continues, and finally stabilizes at a relatively high level.