Economics Suppose that at date 1 the distribution of income is (1, 2, 3), while later, at date 2, it is found to be (2, 3, 4). Verify for yourself that for a poverty line of 2 the reduction in the headcount index of poverty is entirely due to growth in the mean, i.e., that the redistribution component is zero. Now suppose the distribution at date 2 is (1.5, 1.5, 3) (as in question 1). Is the change in poverty now due entirely to redistribution? Discuss how would your answer depends on what measure of poverty you use.

Economics Suppose that at date 1 the distribution of income is (1, 2, 3), while later, at date 2, it is found to be (2, 3, 4). Verify for yourself that for a poverty line of 2 the reduction in the headcount index of poverty is entirely due to growth in the mean, i.e., that the redistribution component is zero. Now suppose the distribution at date 2 is (1.5, 1.5, 3) (as in question 1). Is the change in poverty now due entirely to redistribution? Discuss how would your answer depends on what measure of poverty you use.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter12: Income Distribution, Poverty, And Discrimination

Section: Chapter Questions

Problem 1SQP

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The government announces programs designed to reduce the share of income going to the top quintile from 60% to 20%. You predict that the most likely result is that: O mean household income will fall, because the highest income earners will earn less and work less. median household income will rise, because some of the 40% of redistributed income will be transferred to the third quintile. after redistribution, each quintile will receive 20% of total wealth. O the lowest quintile will receive the 40% taken from the top quintile and switch places.
Suppose there is an economy where 80 percent ofpeople earn more than their parents and 40 percentend up in a different income quintile than theirparents. What measure of the income distributiondoes the first statistic tell you about? What aboutthe second?
In season three of the TV show “The West Wing,”the federal government considers redefining thenational poverty measure in a way that wouldclassify an additional 4 million people as poor.The president worries that his administration willbe criticized for leading the country into greaterpoverty. Explain whether this change would havereflected a shift in an absolute measure of poverty,a relative measure of poverty, or whether it cannot be known. Finally, explain why all else equal,the president is not responsible for causing greaterpoverty
Officials in fluxemburg are concerned about the current level of income inequality in their country, where the highest quintile of families currently earns 60% of the country's income. The central government has income information on its citizenry, and they want you to help them interpret the data from a 15-year period. The following table gives data on how families have moved between income quintiles between the years shown. ral in the missing values in the distribution table for familles in Fluxemburg; then use the information in the table to answer the following questions. Income Distribution in 2007 (Percent) Third Quintile Fourth Quintile Lowest Quintile Income Distribution in 1992 Highest Quintile Second Quintile Highest Quintile Second Quintile Third Quintile Fourth Quintile Lowest Quintile 65 12 13 51 18 8 12 -0* 52 Looking at families in the lowest quintile of income in 1992 (bottom row), you can report that higher quintile of income distribution by 2007. 6 10 16 57 11 5 14 66…
How is absolute poverty measured, in comparison to the distribution of national income? Write down a statistic for each measurement. List 3 countries in Latin America with extremely high rates of absolute poverty and 3 countries with very high income inequality. What are 2 factors which may have increased absolute poverty rates throughout the region’s history? Finally, provide 2 factors which have increased income inequality in Latin America throughout its history.
z/attempt.php?attempt=321446&cmid%3D203021&page%3D3 O E. 0.78. Which of the following is not counted in the GNP of the United States? Lütfen birini seçin: O A. The wage earned by a Japanese citizen who who works in Japan. O B. The wage of a U.S. citizen who works in a foreign country for a foreign firm. O C. The interest earned by a U.S. bank on loans to a business firm located in Brazil. OD The value of services that are produced by state and local governments in the United States. OE. The profit earned by a restaurant located in the United States but owned by a Mexican company Refer to the information provided in Table 22.4 below to answer the question(s) that follow.
Questions: what are some of the dimensions of economic inequality and what is considered income? As in the case of income distribution, calculation of wealth distribution is done by different entities using different measurements, resulting in a disparity in outcomes. In fact, commonly, wealthis narrowly defined as financial wealth—namely, cash on handand the money value of tangible and nonliquid assets. Even justthe market valuation of financial portfolios is commonly used todefine financial wealth. However, some may extend the definitionto include the value of income streams and insurance rights that,for the most part, cannot be transacted or encumbered. Theseinclude Medicare, Medicaid, and Social Security. When suchtransfers and public assistance are included, the poor and manyelderly could benefit, reducing the wealth disparity (Galbraith2016). To obtain net wealth, the value of the debts are subtractedsubtracted from the value of the assets. Galbraith stated thatfinancial wealth…
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. O The adjusted poverty rate has declined rapidly and is now less than half of the official poverty rate. O The poverty rate declined substantially in the period before the War on Poverty, but not in the period after the start of the War on Poverty. O In 2018, the adjusted poverty rate was only 4 percentage points lower than the official rate in 1970. O The War on Poverty has been largely ineffective in reducing the rate of poverty in the United States.
If the area between the diagonal line of absolute equality and the Lorenz curve is greater for China than for the United States, we can conclude that the Distribution of income in China is less equal than in the United States. Relative distributions of income in the two countries are the same. O Distribution of income in China is as equal as in the United States. O Distribution of income in China is closer to being equal than in the United States.
Table: Income Distribution in Four Countries provides recent data from the World Bank on the distribution of income in four countries. Percent income top quintile Percent income middle three quintiles combined O Bangladesh. Costa Rica. Table: Income Distribution in Four Countries Bangladesh El Salvador 41.4% 46.4% O Mexico. 50.0% 47.7% 8.6% Percent income bottom quintile Based on the data, the country with the distribution of income that is closest to equal is: El Salvador. Mexico 50.1% 5.9% 44.2% Costa Rica 54.0% 5.7% 41.8% 4.2%
The figure below is the Lorenz curve of a population. Based on this figure, which of the following statements are correct? Cumulative share of land (%) Landowners' share of land 100- 30 ר 0 Perfect equality line 50 80 100 Cumulative share of the population from least to most land owned (%) O 50% of the population owns 20% of the land. 30% of the population owns 1% of the land each. O 20% of the population owns 2% of the land each. The bottom 80% own 70% of the land
A5. Suppose that the initial rural distribution of income is (1, 2, 3, 4) while the initial urban distribution is (3, 4). The poverty line is 2, so the overall poverty rate (headcount index) is 1/3. Now imagine that all of the rural poor move to urban areas and each of them gains 20% in real income. Verify that the overall poverty rate falls to 1/6, yet the urban poverty rate rises from zero to 1/4.