A. THE SOURCES OF INEQUALITY

Statistics show that in 1998 the median income of American families was $38.885-this means that half of all families received less than this figure while half received more. This number concerns the distribution of income, which shows the variability or dispersion of incomes. To understand the income distribution, consider the following experiment Suppose one person from each household writes down the yearly income of his or her household on an index card. We can then sort these cards into income classes. Some of the cards will go into the lowest 20 percent, the group with under $16,116 of income. Some go into the next class, A few go into the top 5 percent of households, those with incomes of $132 and above.

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