Module 12 Assessment: Income Distribution Instructions Only provide your opinion

Question

Module 12 Assessment: Income Distribution Instructions Only provide your opinions when specifically called for. In all other cases your answer(s) should rely on the text and module materials and not on the internet, showing your capacity to apply the appropriate economic principles and concepts correctly. 1. How would you define income inequality and how is it measured? 2. What has happened to income inequality in the United States since the end of the Second World War in 1945 and what evidence can you provide to support your answer? 3. What are the reasons for the changes in income inequality since 1945. Suggestion: Click here to visit the Web site for the documentary film Inequality for All. The site enables you to rent or purchase the film, if you choose. Or you can click on “Graphics Package” to download a free copy of informative graphics from the film. Take a look at those. Summarize what you learn, and share your thoughts.

Explanation / Answer

Income inequality can be defined as the differences in the incomes of the most wealthy and the person with the least income. It is the unequal distribution of the income across the households of various regions. It is presented as the percentage of income to percentage of population.

It is measured by finding the difference of the income across the households. By measuring the difference between the most wealthy and the least wealthy person in the region, income inequality is measured.

2. The income inequality in the United States since the end of the Second world war has been increased, since the share of the nation's income received by higher income households has increased.

3. The changes in income inequality is due to the reasons that the share of the income received by higher income households has increased. This is due to the amendments in the Labor Law which has raised the income received by higher income households.

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