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The Lorenz curves in the graph above show the effects of a tax system on income inequality. Which of the following statements must be true? O Before the tax, 20% of families lived below the poverty level, and after the tax, none did. The tax redistributed income only from the top 20% of families to the lowest 20% O The tax system is proportional. The tax system is regressive. The tax system is progressive.

The Lorenz curves in the graph above show the effects of a tax system on income inequality. Which of the following statements must be true? O Before the tax, 20% of families lived below the poverty level, and after the tax, none did. The tax redistributed income only from the top 20% of families to the lowest 20% O The tax system is proportional. The tax system is regressive. The tax system is progressive.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Question 45 100 80 60 40+ After Тах Before Тах 20 40 80 Percent of Families 60 100 The Lorenz curves in the graph above show the effects of a tax system on income inequality. Which of the following statements must be true? Before the tax, 20% of families lived below the poverty level, and after the tax, none did. The tax redistributed income only from the top 20% of families to the lowest 20%. The tax system is proportional. The tax system is regressive. The tax system is progressive. Percent of Income 20
Transcribed Image Text:Question 45 100 80 60 40+ After Тах Before Тах 20 40 80 Percent of Families 60 100 The Lorenz curves in the graph above show the effects of a tax system on income inequality. Which of the following statements must be true? Before the tax, 20% of families lived below the poverty level, and after the tax, none did. The tax redistributed income only from the top 20% of families to the lowest 20%. The tax system is proportional. The tax system is regressive. The tax system is progressive. Percent of Income 20
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