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- Explain how a country may experience greater equality in the distribution of income, yet still experience high rates of poverty. Hint: Look at the Clear It Up 'How do governments measure poverty in low-income countries?' and compare to Table 15.5.What are the main reasons economists give for the increase in inequality of incomes?A group 0f 10 people have the following annual incomes: 24,000,18,000,50,000,100,000,12,000,36,000,80,000,10,000,24,000,16,000. Calculate the share of total income that each quintile receives from this income distribution. Do the top and bottom quintiles in this distribution have a greater or larger share of total income than the top and bottom quintiles of the U.S. income distribution?
- Describe how each of these changes is likely to affect poverty and inequality: Incomes rise for low-income and high-income workers, but rise more for the high-income earners. Incomes fall for low-income and high-income workers, but fall more for high-income earners.How does the TANF attempt to loosen the poverty trap?What is the difference between poverty and income inequality?
- What are some reasons why a certain degree of inequality of income would be expected in a market economy?Identify some public policies that can reduce the level of economic inequality.Describe how a push for economic equality might reduce incentives to work and produce output. Then describe how a push for economic inequality might nut have such effects.
- How has the inequality of income changed in the U.S. economy since the late 1970s?Why is there reluctance on the part of some in the United States to redistribute income so that greater equality can be achieved?Using two demand and supply diagrams, one for the low-wage labor market and one for the high-wage labor market, explain how information technology can increase income inequality if it is a complement to high-income workers like salespeople and managers, but a substitute for low-come workers like file clerks and telephone receptionists.
