Refer to Figure 18-8 to answer the following questions. a. Did ...

[itsmyluck]

Refer to Figure 18-8 to answer the following questions.
 
  a. Did the distribution of income become more equal in 2016 than it was in 2015, or did it become less equal? Explain.
  b. If area A = 1,900, area B = 450, and area C = 2,650, calculate the Gini coefficient for 2015 and the Gini coefficient for 2016.

Question 2

As a percentage of GDP, federal expenditures ________ from 1950 to the early 1990s, ________ from 1992 to 2001, and have ________ since 2001.
 
  A) rose; rose; fallen B) fell; rose; fallen C) rose; fell; risen D) fell; fell; risen

[otokexnaru]

Answer to Question 1

a. The distribution of income became less equal in 2016. The Lorenz Curve for 2016 is farther from the diagonal line of equality than is the Lorenz Curve for 2015.
b. The Gini Coefficient = (the area inside the Lorenz Curve)/(the area beneath the diagonal line of equality). Thus, for 2015, the Gini Coefficient = (A)/(A + B + C) = 1,900 /5,000 = 0.38. For 2016, the Gini Coefficient = (A + B)/(A + B + C) = 2,350 /5,000 = 0.47.

Answer to Question 2

C

[itsmyluck]

Thank you

[otokexnaru]

Happy to help you