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Household Country A Country B Income Income Income (percentage) (percentage) Lowest 20% 10 Second 20% 12 Third 20% 18 15 Fourth 20% 26 24 Highest

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Household Country A Country B Income Income Income (percentage) (percentage) Lowest 20% 10 Second 20% 12 Third 20% 18 15 Fourth 20% 26 24 Highest 20% 34 49 1. Create a Lorenz Curve graph showing the actual distribution of income for Country A and B (be sure to label the curve for each country). Show the line of equality." 2. Which country has a more equal distribution of income? 3. Explain 3 factors that will likely cause income inequality (a gap between rich and poor) to arise. 4. Name 2 tools a government can use to redistribute income in order to reduce income inequality. Explain each tool

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