Exam 18: Who Gets What the Distribution of Income

Our ability to manage Social Security as a "pay-as-you-go" program (in which taxes collected from those currently working are used to make benefits payments to those currently retired)is impaired when the number of retirees per worker increases. The current concern about the stability of Social Security is based primarily on projections that there will many more retirees per worker when the baby boomers begin to retire. Then, if we want to maintain a pay-as-you-go system, we can:

Refer to the graph shown. The top 20 percent of the families earn:

In most developed countries, the class system:

If redistribution is a public bad, rather than a public good, redistributing income to the poor makes others feel that society is:

Income is more unequally distributed than wealth in the United States.

Income inequality increased in the United States from 1929 to 1970 and decreased thereafter.

The U.S. income tax is a:

The price of food relative to other goods has:

A Lorenz curve that becomes less bowed out implies:

How does the distribution of income compare to the distribution of wealth in the U.S.? What does this imply about the respective Lorenz curves?

Positive economics is concerned with justifying a particular distribution of income.

Bertrand de Juvenal's views on income distribution and fairness can best be described by the statement:

Federal tax and expenditure programs:

If a nation's Lorenz curve lies on the 45-degree line of income equality:

If there were no income inequality in a nation, its Lorenz curve would be:

Our ability to manage Social Security as a "pay-as-you-go" program (in which taxes collected from those currently working are used to make benefits payments to those currently retired)is impaired when the number of retirees per worker increases. The current concern about the stability of Social Security is based primarily on projections that there will many more retirees per worker as the baby boomers continue to retire. Then, if we want to maintain a pay-as-you-go system, we can:

What does it mean if the gap between a Lorenz curve and the diagonal line gets smaller over time? Explain.

What is the Gini coefficient,and what is it used for? What would a Gini coefficient that was close to zero imply about inequality?

The Lorenz curve would be a diagonal line if income were distributed equally.

When the top marginal tax rate fell from 40 to 35 percent, with other things the same, the U.S. income tax system became: