The Table Shows the Distribution of Money Income and Income

question 180

Essay

The table shows the distribution of money income and income after taxes and transfers. Draw the Lorenz curves for these cases on a single graph. Comment on how government policy affects the income distribution.
$\begin{array}{|c|c|c|}\hline \text { Quintile } & \begin{array}{c}\text { Money Income } \\\text { (Before Tax) }\end{array} & \begin{array}{c}\text { Lnceme Acjusted } \\\text { for Taxes and } \\\text { Transfers }\end{array} \\\hline \text { Lowest } & 10 & 15 \\\hline \text { Second } & 12 & 18 \\\hline \text { Third } & 18 & 20 \\\hline \text { Fourth } & 20 & 22 \\\hline \text { Highest } & 40 & 25 \\\hline \text { Total } & 100 \% & 100 \% \\\hline\end{array}$

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Definitions:

Openness

A personality trait reflecting a willingness to experience new ideas, activities, and feelings.

Empowerment

The act of granting power or authority to individuals or groups, typically aimed at enhancing their control over their own lives and decision-making.

Democratic Behaviours

Actions that promote participation, equality, freedom of speech, and respect for all individuals in a group or society.

Participative Behaviours

The actions of individuals who are actively involved and contribute to group or organizational decision-making processes.