Median Household Income Flashcards, test questions and answers

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What is Median Household Income?

Median Household Income is an important economic measure that provides insight into the financial health of a nation and its citizens. It is defined as the amount of money earned by the median, or middle, household in a given country. This number can be used to compare incomes among different countries, and to assess how wages have changed over time within a single nation.The median household income for all countries has risen steadily since World War II, with some fluctuations depending on economic cycles. In the United States, for example, it rose from $13,737 in 1950 to $60,336 in 2017 – an increase of 338%. However, despite this overall rise in incomes there are still significant disparities between countries and within them. For instance, while the US was second only to Luxembourg in 2017 when it came to overall median household income levels (based on purchasing power parity), it lagged behind many other developed nations such as Norway and Switzerland when looking at disposable incomes (adjusted for taxes).The primary driver of changes in median household income is usually changes in wages; however there are other factors that can also influence these numbers such as inflation and population growth/decline. When assessing changes over time it’s important to consider these other factors so that you have an accurate representation of what’s really changing economically. There are many debates surrounding how best to use these numbers when evaluating national economies. Some suggest they should be used as primary indicators of economic progress while others argue they don’t accurately reflect true shifts in wealth or provide sufficient context about who is benefiting from growth most (or least). However one thing is certain: Median Household Income remains one important tool used by governments around the world for measuring their citizens’ prosperity levels over time.