Over the past 20 years, how has the distribution of income in the United States changed?

• A. Income inequality has decreased, with income becoming more evenly distributed.
• B. Income distribution has remained largely unchanged.
• C. The lowest income groups have seen the largest gains in income.
• D. Income inequality has increased, with a larger share of income going to the top earners.

Answer: (D)

Verified step by step guidance

1. Understand the concept of income distribution, which refers to how total income is shared among individuals or groups in an economy.
2. Recognize that income inequality measures the extent to which income is distributed unevenly among a population, often focusing on the gap between the highest and lowest earners.
3. Review historical data and studies on U.S. income distribution over the past 20 years, noting trends such as changes in the share of income received by the top earners versus lower income groups.
4. Analyze key indicators like the Gini coefficient, income shares of the top 1% or 10%, and median income growth to assess whether income inequality has increased or decreased.
5. Conclude that the evidence shows income inequality has increased, meaning a larger share of total income has gone to the top earners, rather than income becoming more evenly distributed or the lowest income groups gaining the most.