Other Things Equal, Tax Cuts Favoring the Rich and Reductions

question 96

Multiple Choice

Other things equal, tax cuts favoring the rich and reductions in funding for government programs favoring the poor would be expected to:

• A) increase income inequality, causing the Lorenz curve to bend toward the diagonal line.
• B) decrease income inequality, causing the Lorenz curve to bend toward the diagonal line.
• C) increase income inequality, causing the Lorenz curve to bend away from the diagonal line.
• D) decrease income inequality, causing the Lorenz curve to bend away from the diagonal line.

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