CHAPTER 20 INCOME INEQUALITY AND POVERTY 459 different social programs have contributed to this phenomenon? (Hint: See Chapter 12.) 3. Economists often view life cycle variation in income as one form of transitory variation in income around people’s lifetime, or permanent, income. In this sense, how does your current income compare to your permanent income? Do you think your current income accurately reflects your standard of living? 4. The chapter discusses the importance of economic mobility. a. What policies might the government pursue to increase economic mobility within a generation? b. What policies might the government pursue to increase economic mobility across generations? c. Do you think we should reduce spending on current welfare programs in order to increase spending on programs that enhance economic mobility? What are some of the advantages and disadvantages of doing so? 5. Consider two communities. In one community, ten families have incomes of $100 each and ten families have incomes of $20 each. In the other community, ten families have incomes of $200 each and ten families have incomes of $22 each. a.
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