Government taxation and government benefits attempts to push the curve inward. Lorenz curve measures income equality distribution. The Gini coefficient measures the area between the 45-degree line and the Lorenz Curve divided by the entire area between the 45-degree line, where 0 equals absolute even distribution of income/equality. With that said:
1. Table 4.2 shows that Gini coefficient has increased from .349 in 1970 to .469 in 2005, indicating that income inequality in the has been a. increasing in the past 35 years.
2. In which year is the level of inequality is highest and lowest
In the year 2005, the level of inequality is greatest, the Gini coefficient is 0.469, which is the closest number to 1 in the given data. On the other hand, 1970 had the lowest level of income inequality with a Gini coefficient of 0.394, which is closest to 0 in the given data.
3. What is the difference between income and wealth? (Be specific). Why do you think that the level of wealth inequality is higher than the level of income inequality? (Be specific).
The difference between wealth and income in economics is that wealth is …show more content…
A small percentage of people who actually have “old money” such as the Strykers and Rockefellers, just to name a couple, are the outliers in most data that impacts graphing greatly when it comes to calculating wealth equality in the USA. Referring mainly to the USA, taking the previous information into consideration and with the information that has been made public with the help of Bernie Sanders, the top one-tenth of 1 percent of Americans own almost as much wealth as the bottom 90 percent, the Lorenz curve table would resemble a healthy tilted D as oppose to a slim tilted D, which shows great inequality. In other countries, “old money” usually stems from royal families or those who have great
1. Table 4.2 shows that Gini coefficient has increased from .349 in 1970 to .469 in 2005, indicating that income inequality in the has been a. increasing in the past 35 years.
2. In which year is the level of inequality is highest and lowest
In the year 2005, the level of inequality is greatest, the Gini coefficient is 0.469, which is the closest number to 1 in the given data. On the other hand, 1970 had the lowest level of income inequality with a Gini coefficient of 0.394, which is closest to 0 in the given data.
3. What is the difference between income and wealth? (Be specific). Why do you think that the level of wealth inequality is higher than the level of income inequality? (Be specific).
The difference between wealth and income in economics is that wealth is …show more content…
A small percentage of people who actually have “old money” such as the Strykers and Rockefellers, just to name a couple, are the outliers in most data that impacts graphing greatly when it comes to calculating wealth equality in the USA. Referring mainly to the USA, taking the previous information into consideration and with the information that has been made public with the help of Bernie Sanders, the top one-tenth of 1 percent of Americans own almost as much wealth as the bottom 90 percent, the Lorenz curve table would resemble a healthy tilted D as oppose to a slim tilted D, which shows great inequality. In other countries, “old money” usually stems from royal families or those who have great