The shift in income distribution in U.S. in the last two decades by using the graph provided
Concept Introduction:
Quintile • There are five equal groups.
Income inequality • It refers to the unequal distribution of income earned by households of the country dividing the populace into the rich and the poor.
Explanation of Solution
From 1980s and the subsequent period, income is more concentrated among the top fifth of the population. At the same time, the income share of the bottom fifth has declined. The former increased from 43.7% in 1980s to 51% in the year 2013. In all quartile till the fourth one, the income share has decreased from 1980s to 2013. In second quintile, it has decreased from 10.3% to 8.3%, in the third from 16.9% to 14.4%, and in fourth from 24.9% to 23%.
The reasons for this inequality are analyzed from time to time in the United States. The major and indisputable reasons include globalization, income differences because of different level of educational qualification, race disparities etc.
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Chapter 18 Solutions
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
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- Outline 2 uses of National Income Statisticsarrow_forward6. Fill in the bottom table by converting nominal incomes into real incomes. Nominal Mean Household Income (current dollars) 1980 2014 Lowest 20% $4,300 $11,700 Highest 20% $46,500 $194,000 Highest 5% $69,500 $332,000 CPI 36.5 100 Real Mean Household Income (constant dollars) 1980 2014 change Lowest 20% Highest 20% Highest 5% a C Briefly summarize your findings from the above data.arrow_forwardWhat is the formula of Income Approach, one of the methods of Gross Domestic Product and how is it calculated?arrow_forward
- Page 551 5. Using the following national income accounting data, compute (a) GDP, (b) NDP, and (c) NI. All figures are in bilions. Compensation of employees $194.2 U.S. exports of goods and services 17.8 Consumption of fixed capital 11.8 Government purchases 59.4 Taxes on production and imports 14.4 Net private domestic investment 52.1 Transfer payments U.S. Imports of goods and services 13.9 16.5 Personal taxes 40.5 Net foreign factor income 2.2 Personal consumption expenditures 219.1 Statistical discrepancyarrow_forwardThe second question pleasearrow_forwardPls provide good solutionarrow_forward
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