The figure below shows two Lorenz curves, Y and Z. Figure 19.1
In Figure 19.1, which of the following could occur in the short run given the introduction of a regressive income tax?
A) The Lorenz curve OZB would shift to OYB.
B) The Lorenz curve OYB would coincide with the line OXB.
C) The Lorenz curve OZB would coincide with the line OXB.
D) The Lorenz curve OYB would coincide with the horizontal axis.
E) The Lorenz curve would shift from OYB to OZB.
Correct Answer:
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