The Lorenz curve and proportion of total income that is received by the rich and poor quintile.

Question

On the 1st of April 2018, the South African National Treasury increase the value-added tax rate from 14% to 15%. This policy change had a wide-ranging impact on society. Discuss some of the benefits and drawbacks of making use of this type of tax to generate government revenue and what we may expect in terms of its impact on inflation and GDP growth within the economy. Please use some of the economics graphs to explain some scenarios

Answer 1

Question

Chapter 23, Problem 2DQ

To determine

The Lorenz curve and proportion of total income that is received by the rich and poor quintile.

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