Question
Income Brackets The following diagram shows the movement of households in a certain country among three income groups affluent middle class and poor over the
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/06/665e4e8d26758_525665e4e8d1d9c0.jpg)
Income Brackets The following diagram shows the movement of households in a certain country among three income groups affluent middle class and poor over the 11 year period 1980 1991 72 000 in 1994 dollars 24 000 in 1994 dollars AFFLUENT 27 9 MIDDLE CLASS 30 8 POOR 7 3 8 i a Use the transitions shown in the diagram to construct a transition matrix assuming zero probabilities for the transitions between affluent and poor Let 1 affluent 2 middle class and 3 poor 0 721 0 279 0 0 847 0 08 0 073 0 0 308 0 692 b Assuming that the trend shown was to continue what percent of households classified as affluent in 1980 were predicted to become poor in 2002 Give your answer to the nearest 0 1 22 3 04 c According to the model what percentage of all households will be in each income bracket in the long term Give your answer to the nearest 0 1 affluent 172
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/06/665e4e8d26758_525665e4e8d1d9c0.jpg)
Income Brackets The following diagram shows the movement of households in a certain country among three income groups affluent middle class and poor over the 11 year period 1980 1991 72 000 in 1994 dollars 24 000 in 1994 dollars AFFLUENT 27 9 MIDDLE CLASS 30 8 POOR 7 3 8 i a Use the transitions shown in the diagram to construct a transition matrix assuming zero probabilities for the transitions between affluent and poor Let 1 affluent 2 middle class and 3 poor 0 721 0 279 0 0 847 0 08 0 073 0 0 308 0 692 b Assuming that the trend shown was to continue what percent of households classified as affluent in 1980 were predicted to become poor in 2002 Give your answer to the nearest 0 1 22 3 04 c According to the model what percentage of all households will be in each income bracket in the long term Give your answer to the nearest 0 1 affluent 172
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started