Question

A method often used by economists to look at distribution of income in a society's economy involves:__________

Answer 1

Answer:

Quintiles, or dividing a whole group into fifths

Explanation:

Income can be described as the amount of money gotten from the sale of a particular good or service. In a country with a large population, it is necessary that the income generated in the country be distributed among the population.

This distribution is important for the development of a country as it helps to reduce the poverty rate.

Income distribution can be defined as the process in which a country gross domestic product is shared among the population. GDP is the amount of money acquired by a country after the sale of goods and services.

Quintiles method is carried out by categorizing all households according to the amount of income that is earned. This classification is done by grouping them from the lowest amount of income to the highest amount. These households are then divided into five groups with each of them having equal number of persons.

Hence economists make use of the quintiles method or dividing a whole group into fifths because it is very effective in income distribution.