Chapter 15

Chapter 15 - Chapter 15 Exhibit 1 2 pg.364-365 Government...

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Chapter 15 Government can change the distribution of income through the uses of taxes and transfer payments Ex ante distribution of income: before tax and /or transfer payment distribution of income Ex post distribution of income: after tax and /or transfer payment distribution of income Transfer payments – payments to persons that are not made in return for goods and services currently supplied In-kind transfer payments – transfers made in the form of a specific good rather than in cash (food stamps, medical assistance, subsidized housing) Exhibit 3 pg.366 Can everyone become better off as the income distribution becomes more unequal? o An unequal income distribution is not necessarily a sign of an income group is worse off o Everyone could be better off at the same time that the income distribution becomes more unequal Exhibit 4 Simple equation o Individual income = labor income + asset income + transfer payments – taxes
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Chapter 15 - Chapter 15 Exhibit 1 2 pg.364-365 Government...

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