1. Suppose you are given the following information about the income distribution and intergenerational correlation from the equation =+p in 2010 and 2022. 2010 2022 2022 with compensating wage differential Share of Aggregate Income Lowest 20% 3.3 3.0 5.0 Second 20% 8.5 8.2 15.0 Third 20% 14.6 14.0 20.0 Fourth 20% 23.4 22.5 25.0 Highest 20% 50.3 52.1 35.0 0.10 0.20 0.50 a. Plot the Lorenz curves for 2010 and 2022. Has inequality increased or decreased over time? Explain. b. What has happened to intergenerational mobility over time? How do you interpret ? c. Most policies that target inequality either target low-income families by trying to increase wages and opportunities, like EITC and Pell Grants, or target the high-income families by limiting wages and opportunities, like an estate tax. In your opinion, should the government focus on the low or high end? Why? d. Suppose you adjust the wage distribution to account for compensating wage differentials. What happens to inequality when we include compensating wage differentials? Explain whether this increases or decreases the role for policy