Consider the Following Distribution of Income in a 12-Person Economy

question 1

Essay

Consider the following distribution of income in a 12-person economy, with the modern urban
wage  3, the traditional rural income  1, and the informal urban wage  2: (1,1,1,1,2,2,2,2,3,3,3,3).The poverty line  1.25.Suppose rural incomes are raised to 1.5 through expanded agricultural exports.What happens to relative inequality? Absolute poverty? Calculate the Ahluwalia-Chenery welfare index for terciles (3 fractiles) under GNP weights and equal weights.Why is the equal-weighted index higher?

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Definitions:

Parent-Company Extension Method

An accounting approach used in consolidation, where the parent company's financial statements extend to include the subsidiary's transactions and balances.

Goodwill

Goodwill is an intangible asset that arises when a company acquires another business for more than the fair value of its net identifiable assets.

NCI

Non-Controlling Interest, which refers to the equity in a subsidiary not attributable, directly or indirectly, to the parent company.

Common Shares

Equity securities representing ownership in a company, giving holders voting rights and a share in the company's profits via dividends.