83. Imagine two cities, Engelgrad andLegreeville, where the rich, middle, and po

Question

83.   Imagine two cities, Engelgrad andLegreeville, where the rich, middle, and poor income recipients inone city have annual incomes identical to their counterparts'incomes in the other city. In Engelgrad, the poorest families oneyear almost always end up as the richest families the next year andbecome middle-income families the year after that. In Legreeville,however, the poor remain poor and the rich remain rich. Which ofthe following is true about the two cities? A.   Annual data on the distribution ofincome will indicate that the degree of income inequality in thetwo cities is identical. B.   The degree of lifetime incomeinequality in the two cities is identical. C.   The income mobility of people in thetwo cities is identical. D.   The distribution of annual income ismore unequal in Legreeville. 83.   Imagine two cities, Engelgrad andLegreeville, where the rich, middle, and poor income recipients inone city have annual incomes identical to their counterparts'incomes in the other city. In Engelgrad, the poorest families oneyear almost always end up as the richest families the next year andbecome middle-income families the year after that. In Legreeville,however, the poor remain poor and the rich remain rich. Which ofthe following is true about the two cities?

Explanation / Answer

A. Annual data on the distribution of income will indicate that thedegree of income inequality in the two cities is identical.

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