Principles of Economics, Chapter 14: Income Distribution

What is income distribution?

How a nation’s total income is distributed among its citizens

What does it mean when the Lorenz curve is outwards?

The country’s percentages between wealthiness, middle class, poverty, etc. are unequal.

What does it mean when the Lorenz curve is inwards?

The country’s percentages between wealthiness, middle class, poverty, etc. are equal.

What are the 3 flaws when measuring a nation’s income distribution?

Ignores income mobility, ignores government transfer payments, and ignores income tax

What is income mobility?

The increase and decrease of income throughout the years.

What is government transfer payments?

Money the government gives to impoverished people.

What is progressive tax rate?

More income means higher tax rate.

What income class pays 97% of tax revenue?

The wealthy 50% or those who make $130k or more per year

Where is the 2024 poverty line?

$15,060/yr.