The table shows the distribution of market income.Suppose the government redistributes income by taxingthe 60 percent of households with the highest marketincomes 10 percent, then distributing the tax collectedas an equal benefit to the 40 percent with the lowestmarket income.What percentage of total market income is redistributedto the second 20 percent of households?What is the income share of the third 20 percent ofhouseholds after tax and redistribution?>>> Answer to 1 decimal place.earchThe second 20 percent of households receives benefitsequal to percent of total market income.The third 20 percent of households earns percent oftotal income after tax and benefits.Ipoint(s)HouseholdsLowest 20 percentSecond 20 percentThird 20 percentFourth 20 percentHighest 20 percentMarket income(percentage of totalmarket income)59203036Next

Regressive tax system is a system in which a person pays a fixed amount of tax regardless of income.…

Answered: The second 20 percent of households…

The second 20 percent of households receives benefits percent of total market income. equal to spercent of The third 20 percent of households earns total income after tax and benefits.

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Costs Of Taxation

Section: Chapter Questions

Problem 3CQQ

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Question

The table shows the distribution of market income.
Suppose the government redistributes income by taxing
the 60 percent of households with the highest market
incomes 10 percent, then distributing the tax collected
as an equal benefit to the 40 percent with the lowest
market income.
What percentage of total market income is redistributed
to the second 20 percent of households?
What is the income share of the third 20 percent of
households after tax and redistribution?
>>> Answer to 1 decimal place.
earch
The second 20 percent of households receives benefits
equal to percent of total market income.
The third 20 percent of households earns percent of
total income after tax and benefits.
I
point(s)
Households
Lowest 20 percent
Second 20 percent
Third 20 percent
Fourth 20 percent
Highest 20 percent
Market income
(percentage of total
market income)
5
9
20
30
36
Next

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