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Chapter 30: Problem 27

Between 1968 and 2008 , the percentage share of total income grew for the _____. a) lowest two quintiles b) the middle three quintiles c) the highest quintile d) the highest quintile and the lowest quintile

Short Answer

Expert verified
(c) the highest quintile

Step by step solution

01

Understand Quintiles

Quintiles are a way to divide a group into five equal parts. In this context, we're dividing the population based on their income distribution. The lowest quintile represents the lowest 20% of income earners, while the highest quintile represents the top 20% of income earners.
02

Evaluate Option (a)

Option (a) suggests that the percentage share of total income grew for the lowest two quintiles (the bottom 40% of income earners) between 1968 and 2008. However, it is well known that income inequality has increased over this period, and the share of total income for the lowest income earners has generally decreased. Therefore, this option is not correct.
03

Evaluate Option (b)

Option (b) suggests that the percentage share of total income grew for the middle three quintiles (the middle 60% of income earners) between 1968 and 2008. While the middle class did see some income growth during this period, it is less substantial than the income growth experienced by higher earners, which leads to the conclusion that option (b) is not correct.
04

Evaluate Option (c)

Option (c) suggests that the percentage share of total income grew for the highest quintile (the top 20% of income earners) between 1968 and 2008. This option is consistent with the observed increase in income inequality over this period, as many studies show that the richest groups proportionately gained more income than others. Thus, option (c) is the correct answer.
05

Evaluate Option (d) for Completeness

Option (d) suggests that the percentage share of total income grew for both the highest and the lowest quintile between 1968 and 2008. We've already established that the lowest quintile did not see its percentage share of total income grow. Thus, option (d) is incorrect. In conclusion, the correct answer is: (c) the highest quintile

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