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The Table Shows the Distribution of Money Income and Income

Question 255

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The table shows the distribution of money income and income after taxes and transfers. Draw the Lorenz curves for these cases on a single graph. Comment on how government policy affects the income distribution.
 Quintile  Money Income  (Before Tax)  Lnceme Acjusted  for Taxes and  Transfers  Lowest 1015 Second 1218 Third 1820 Fourth 2022 Highest 4025 Total 100%100%\begin{array}{|c|c|c|}\hline \text { Quintile } & \begin{array}{c}\text { Money Income } \\\text { (Before Tax) }\end{array} & \begin{array}{c}\text { Lnceme Acjusted } \\\text { for Taxes and } \\\text { Transfers }\end{array} \\\hline \text { Lowest } & 10 & 15 \\\hline \text { Second } & 12 & 18 \\\hline \text { Third } & 18 & 20 \\\hline \text { Fourth } & 20 & 22 \\\hline \text { Highest } & 40 & 25 \\\hline \text { Total } & 100 \% & 100 \% \\\hline\end{array}

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Government affects the income distributi...

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