(a) What is the difference between income inequality and wealth inequality?

(b) Most policies that target inequality either target it at the low end of the income distribution by trying to increase wages of low-income workers, or at the high end of the income distribution by limiting wages of high-income workers. List a few potential policies of each type.

(c) In your opinion, should the government focus on the low end or the high end?

Why?

(d) In order to better understand how sensitive inequality measures are to the choice of measure, provide a graph of an economy with a 90–10 wage gap that is essentially zero but for which the Gini coefficient is close to 1.