Final answer:
Country B has more inequality with a Gini coefficient of 0.49 compared to Country A's 0.37. The Gini coefficient is used to measure income inequality, with a higher number indicating more inequality. Furthermore, countries can have more equal income distribution but still face high poverty if overall income levels are low.
Step-by-step explanation:
If Country A has a Gini coefficient of 0.37 and Country B has a Gini coefficient of 0.49, Country B has more inequality. The Gini coefficient is a measure where 0 represents perfect equality (every resident has the same income) and 1 represents maximum inequality (one resident earned all the income). Hence, the higher the Gini coefficient, the greater the level of income inequality within a country. So, in this case, the correct answer is (b) Country B.
A country can experience greater equality in the distribution of income yet still have high rates of poverty. This occurs when the income level overall is very low, so even if distributed equally, it is not sufficient to lift the populace above the poverty line. Governments measure poverty differently, and it's important to look at how poverty thresholds are defined in low-income countries. Providing levels of income uniformly among citizens does not necessarily imply reduced poverty if that income is low to begin with.
The concept of a tradeoff between equality and economic output is complex. Several developed countries provide similar levels of income to their citizens but have different levels of inequality. It's argued that a certain degree of inequality does not impact economic output significantly; however, pushing for high levels of equality can potentially reduce incentives, leading to lower economic output.