3) True or False questions:a) Two countries can have the same level of GDP and population size, but different levels ofInequality.b) Two countries can have different levels of GDP and population size, but the same level ofinequality.c): The ethical principles of inequality measurement (anonymity, population, relative income andDalton transfers) are enough to compare any two income distributions in terms of relativeinequality. [Hint: consider part e) in question 1 above]Tomlate the GI

When comparing two or more economies, various economic measures are used to analyze the economic…

Answered: 3) True or False questions: a) Two…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please answer based on information above. Would this transfer increase, decrease, or have no effect on income inequality in this group? Redistributing income from the highest earner to the lowest one would reduce the utility of the top earner and increase the utility of the lowest earner. But what would happen to overall utility in the economy? Would it increase, decrease, or remain the same? Explain your answer. (Hint: does the marginal utility of income diminish as one earns more?)
Please do fast and add explanation and check answer properly.........
Cumulative percentage of income 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0% -Germany ‒‒‒ 10% Singapore 20% 30% 40% 50% %09 70% 80% %06 100% Cumulative percentage of households Figure 5 Lorenz curves for Germany and Singapore Examine the Lorenz Curves for Germany and Singapore shown in Figure 5. Which of the following statements are correct? Select one or more answers. Select one or more: The bottom quintile (bottom 20%) of households have a higher share of total income in Singapore than Germany. The top quintile (top 20%) of households have a higher share of total income in Singapore than in Germany. Singapore will have a lower Gini coefficient than Germany. Germany has a lower level of income inequality than Singapore.
To combat income inequality and to generate increased tax revenues to fund expenditures, government officials decide to aggressively increase how progressive income taxes are, so much so that the top income earners are marginally taxed 90% of their income (and while this marginal tax rate may seem oppressive, these top income earners still have more than enough income to satisfy all of their needs and all but the most extravagant of wants - basically, these earners have more than enough money). Argue why this tax policy is a fair approach to fund government expenditures. Why might this tax policy fail to achieve its objectives (tax revenues would actually decline as a result)?
As income transfer programs accompanying the War on Poverty increased beginning in the latter half of the 1960s, what happened to poverty in the United States? Check all that apply. After the start of the War on Poverty, the downward trend in the poverty rate halted. In 2018, the adjusted poverty rate was only 4 percentage points lower than the official rate in 1970. The poverty rate declined substantially in the period after the War on Poverty, but not in the period before the start of the War on Poverty. The adjusted poverty rate has declined rapidly and is now less than half of the official poverty rate.
For Question 7 please refer to the chart below of the Lorenz Curve for Paraguay and Germany for 2014: Percent of Total Income Paraguay -Germany Percent of Total Population Based on the table above, which of the following is true; Paraguay has a greater degree of Income Inequality Germany has a lower Gini-Coefficient Paraguay has a higher Gini-Coefficient Germany has a greater degree of Income Inequality
The FGT0 measure does not reflect the depth of poverty below the poverty line. [6] (i) Suggest a specific income transfer within this economy that demonstrates this limitation of FGT0. Take $1 from person 2 and give it to person 4. This makes person 2 poorer in absolute terms, but does not change FGT0. (ii) Compute FGT0 after the transfer. Still 3/6. (iii)Discuss why this feature limits how useful FGT0 is as a measure of poverty. FGT0 is not able to capture changes among the poor. For example, the desperately poor could become much better off and, as long as they weren’t so much better off that they cross the poverty line, we would see no improvement in poverty as measured by FGT0.
What does government now do, and what could and should government do, to reduce economic inequality? Discuss the impact of government on economic inequality and how it has changed over time. What are your top three suggestions for specific programs or policies which governments could adopt to change the level and trend of inequality? Why?
The $1.4 billion trick to make us accept income inequality Lotteries take money from the poor and redistribute it unequally. The poor, the uneducated, and minorities play the lottery the most, and it takes a big chunk of their income Source: The Huffington Post, January 12, 2016 If the news clip is correct, how does a lottery change the distribution of income? Draw two Lorenz curves to illustrate your answer. Lotteries result in the distribution of income Draw the Lorenz curve in a country that does not have lotteries. Label it Before Draw the Lorenz curve for the country after the introduction of lotteries. Label it After >>> To reposition the label click on the cross by the label box and dragging it 100 80 60 40- 20 Cumulative percentage of income 100 20 40 60 00 Cumulative percentage of households >>>Draw only the objects specified in the question G
Suppose that the economy of Loserville has the following distribution of income: first quintile 15% of aggregate income second quintile 20% of aggregate income third quintile 20% of aggregate income fourth quintile 20% of aggregate income fifth quintile 25% of aggregate income a. From the information provided, please derive a Lorenz Curve for Loserville. Show graphically. b. From the Lorenz Curve you have drawn, find the Gini Coefficient. c. How does Loserville compare to the United States economy?
Q5. Poverty measures a. The Poverty Gap Index or Normalized Poverty Gap is the Average Poverty Gap divided by the poverty line. Show that the poverty gap index is the FGT index with a = 1 b. A population that has a greater share of extreme poor among the poor will have a higher P2, even if it has the same headcount ratio and poverty gap index as another population. Explain. c. Consider a population with four individuals with incomes y₁ = {7, 3, 8, 4} and a poverty yi line yp 5. Calculate Po, P₁, and P2. = d. What is the Multidimensional Poverty Index (MPI) and how is it a more improved measure of poverty?
Wealth, earnings, and disposable income are just three of several ways of looking at inequality. Imagine a household that earns $80,000 per year from labor. In that year, it also receives an income of $3,000 from investments, pays $12,000 in tax, and receives $7,000 in transfers from the state. Which of the following is its market income and its disposable income? O $83,000; $71,000. O $83,000 $78,000. O $80,000; $68,000. O $80,000; $75,000. J

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