Consider an economy with the following income distribution each person in the bottom quartile of the income distribution earns $15,000 each person in the middle two quartiles earns $40,000 and each person in the top quartile of the income distribution earns $100,000 (a) What is the Gini coefficient...

a For practice one might draw the actual Lorenz curve but this problem is fairly easy as the actual Lorenz curve will be a straight line within income ...

Consider an economy with the following income distribution: each person in the bottom quartile of the income

Question:

Consider an economy with the following income each person in the bottom quartile of the income earns $15,000; each person in the middle two quartiles earns $40,000; and each person in the top quartile of the income earns $100,000.
(a) What is the Gini coefficient associated with this income Suppose the bottom quartile pays no taxes, the middle two quartiles pay 10 percent of its income in taxes, and the top quartile pays 28 percent of its income in taxes. Two-thirds of all tax money is redistributed equally to all citizens in the form of military defense, government pensions (social security), roads/highways, etc. The remaining one-third of tax money is disturbed entirely to the poorest quartile. What is the Gini coefficient associated with this redistribution plan? Would you consider this tax and redistribution plan to be a particularly aggressive income redistribution policy?
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...