Consider an economy with 10,000 individuals. Of them, 5,000 each earn ($25,000;) 3,000 each earn ($40,000;) and
Question:
Consider an economy with 10,000 individuals. Of them, 5,000 each earn \($25,000;\) 3,000 each earn \($40,000;\) and 2,000 each earn \($100,000\).
(a) What is the Gini coefficient for this economy?
(b) What would the Gini coefficient be if the wealthiest 2,000 individuals were taxed 30% of their income with the proceeds being transferred to the 5,000 poorest individuals?
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I can help you determine the Gini coefficient for this scenario and the effect of wealth transfer on income inequality a Gini coefficient before tax We can calculate the Gini coefficient using the Lor...View the full answer
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