\"The rich get richer, and the poor get poorer\" is a simple yet profound way to
ID: 1111241 • Letter: #
Question
"The rich get richer, and the poor get poorer" is a simple yet profound way to think about income inequality. As top earners make more and bottom earners make less, the inequality rate increases. It's a combination of these factors, not just extreme wealth or extreme poverty, that leads to huge gaps between those at the very top and those at the very bottom.
(1) Suppose the top 20% of Brazilian earners make, on average, the equivalent of $100,000 a year. What does the average earner in the bottom 20% make?
(2) A friend tells you he wants to live in a world without income inequality. Discuss the pros and cons using at lease one of the five foundations of economics
Explanation / Answer
1)Nationwide, the average salary paid to lowest 20 % runs around R$721a month, or around $360
2) pros- such work would be idealistic, as everyone would be equal
Cons- there won't be any motivation for anyone to work hard and uplift their financial condition.
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