Examples of the Rich/Poor Ratio from the 2020 Distribution

Analyzing Internal Income Inequality

Consider two hypothetical countries. In Country A, the average annual income for the richest 10% of the population is $100,000, and for the poorest 10% it is $5,000. In Country B, the average annual income for the richest 10% is $40,000, and for the poorest 10% it is $1,000. Based on the ratio of the richest 10% income to the poorest 10% income as a measure of internal inequality, which statement is accurate?

Evaluating the Rich/Poor Ratio as an Inequality Metric

Country A has a rich/poor ratio of 40, while Country B has a rich/poor ratio of 20. This information alone is sufficient to conclude that the wealthiest 10% of the population in Country A have a higher average income than the wealthiest 10% in Country B.

Calculating and Interpreting Income Inequality

You are given the rich/poor ratio for four different countries. This ratio compares the average income of the wealthiest 10% of the population to that of the poorest 10%. Match each country with the most accurate description of its internal income inequality based on its ratio.

A country implements a new economic policy that results in a 15% increase in the average income for the poorest 10% of its population. During the same period, the average income for the wealthiest 10% of the population remains unchanged. How would this change affect the country's rich/poor ratio, which is used as a measure of internal income inequality?

In a specific country, the average annual income for the wealthiest 10% of the population is $150,000. If the country's rich/poor ratio, a measure of internal inequality calculated by comparing the income of the wealthiest 10% to the poorest 10%, is 30, then the average annual income for the poorest 10% of the population is $____.

Imagine a chart that visualizes a country's internal income inequality by showing the average annual income for its wealthiest 10% of citizens as a tall back bar and the average for its poorest 10% as a shorter front bar. The ratio of the back bar's height to the front bar's height is used as the measure of inequality.

• For Country A, the back bar is 50 units high and the front bar is 1 unit high.
• For Country B, the back bar is 100 units high and the front bar is 10 units high.

Based on an

A country experiences a decade of strong economic growth. Despite this, a report shows that its rich/poor ratio, which compares the average income of the wealthiest 10% to that of the poorest 10%, has worsened, increasing from 20 to 50. Which of the following statements provides the most accurate analysis of this situation?