Increased inequality in the distribution of income contributes to A) The same percentage of income received...

Increased inequality in the distribution of income contributes to

A) The same percentage of income received by the highest and lowest quintiles of households

B) A smaller percentage of income received by the highest 20% of households

C) A greater percentage of income received by the highest 20% of households

D) A greater percentage of income received by the lowest 20% of households

Solutions

Expert Solution

Increased income inequality means the rich will get richer and poor will get poorer the first option says the same percentage of incomes received and this means there is no income inequality at all. The second option says a small percentage of income is received by 20% households on the top and this means there will be decrease in income inequality because the higher amount of income will reach to lower households and they can develop. The fourth options is a greater percentage of income received by the lowest 20% this means a platform is established for the lower income people to climb up the economic ladder and this is also related to that of reduced income inequality

Therefore (a,b,d) are wrong

third option is correct and this is because it says the richest 20% receive highest income and this means the lowest income is received by lowest 20% result of which the rich can get more richer and poor can get more poorer and this is directly linked with that of income inequality increase

Therefore (c) is the answer to this question

Rahul Sunny answered 1 year ago

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