D Question 24 Income inequality is indicated by a Lorenz curve that: approaches the vertical axis. lies parallel to the line of income equality. bows down, away from the line of income equality bows up, away from the line of income equality. coincides with the line of income equality. Question 25 Measures which aim at eliminating the income disparity

D Question 24 Income inequality is indicated by a Lorenz curve that: approaches the vertical axis. lies parallel to the line of income equality. bows down, away from the line of income equality bows up, away from the line of income equality. coincides with the line of income equality. Question 25 Measures which aim at eliminating the income disparity

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter12: Income Distribution, Poverty, And Discrimination

Section: Chapter Questions

Problem 6SQ

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Redistribution of income occurs through the federal income tax and government antipoverty programs. Explain whether or not this level of redistribution is appropriate and whether more redistribution should occur.
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Instructions: 1. Refer to the MCONNEL TEXTBOOK CHAPTER 23. DON'T USE ANY OTHER SOURCES Describe the distribution of income in the United States by personal income categories by households and quintile distribution by households. Explain how a Lorenz curve is used to describe income inequality. Define Gini ratio List seven causes of an unequal income distribution. State and evaluate the cases for and against income inequality. Define poverty as the Federal government does. Identify the rate of poverty in the U.S., and the incidence of poverty for various demographic groups, including African Americans, Hispanics, and female-headed households; identify some of the reasons for the poverty of each group. Define social insurance. Describe the major social insurance programs. What is a public assistance program? Describe the major public assistance (welfare) programs.
Canada had the following distribution of Income after taxes in 2006 Based on the information in the tables, which one is the correct Gini coefficient of income inequality? Deciles cumulative share of income Lorenz curve for after tax income in Canada 0% (2006) 1 0% 1 2 2%| 3 6% 0.8 4 11% 0.6 18% 0.4 26% 0.2 37% 50% 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 9 67% share of population 10 100% cumulative share of income equidistribution line O a. 0.47 O b. 0.43 O c. 0.42 O d. 0,44 O e. 0.23 O share of income
Indicators of income inequality and poverty Country Gini coefficient Australia Belgium Canada France Italy Japan Portugal Spain .336 259 .324 .293 .337 .329 .353 .317 Ratio of income at 90th percentile to 10th percentile 4.5 3.3 4.2 3.4 4.3 5.0 4.9 4.6 Poverty rates % households below 50% of average household income 14.6 9.4 12.0 7.2 11.4 15.7 11.9 14.0 Source: OECD 2011 The table shows some selected indicators on income inequality and poverty. Based on these data, which of the following statements are correct? Select one or more answers. Select one or more: The Gini coefficient for Canada means the bottom 10% of households have a greater total income than the bottom 10% of households in Italy. France has a lower overall level of income inequality than Japan. The ratio between households at the 90th percentile and households at the 10th percentile suggests inequality is greater in Australia than in Belgium. Spain has a lower poverty rate than Portugal.
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Question 9 In Country X there are only two income levels: $10,000 and $40,000. Twenty million individuals earn the low income and twenty million earn the high income. The Gini coefficient associated with this income distribution is given by 0.70 0.30 0.35 0.65
2.1 In an effort to make the distribution of income more nearly equal, the government of a country passes a tax law that changes the Lorenz curve from y = 0.97x for one year to y = 0.33x + 0.67x for the next year. Find the Gini coefficient of income for both years. (Round your answers to three decimal places.) before after Compare the distributions of income before and after the tax law was passed. Interpret the result. O The change increases the difference in incomes. The change makes no difference in incomes. O There is not enough information to compare the incomes. The change decreases the difference in incomes. O The change makes the incomes equal. Need Help? Read It
The following figure shows the Lorenz curves of two countries such as LC1 and LC2. Cumulative % of income 100 66.6 33.3 Line of Equality LC 1 LC2 33.33 Cumulative % of household. Which of the following options is correct as per the given figure? a. Both countries face income inequality. b. Inequality in country 2 is greater than inequality in country 1. c. Country 2 has the highest level of inequality because the distance between the Lorenz curve and the line of equality is highest. d. All of the above 66.6 100
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