Imagine two cities, Engelgrad and Legreeville, where the rich, middle, and poor income recipients in one city have annual incomes identical to their counterparts' incomes in the other city. In Engelgrad, the poorest families one year almost always end up as the richest families the next year and become middle-income families the year after that. In Legreeville, however, the poor remain poor and the rich remain rich. Which of the following is true about the two cities?

Question

Quizplus · Accepted Answer

Annual data on the distribution of income will show identical income inequality because the income levels are the same in both cities each year, despite differences in mobility.

Imagine Two Cities, Engelgrad and Legreeville, Where the Rich, Middle