How did income distribution in the United States change during the early 2000s?

• A. Income inequality increased, with a larger share of income going to the top earners.
• B. Income inequality decreased, with income becoming more evenly distributed.
• C. Income distribution remained largely unchanged compared to the previous decade.
• D. Middle-class incomes grew faster than those of the top earners.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of income distribution, which refers to how total income is shared among individuals or groups in an economy. Income inequality measures how unevenly income is spread across the population.
2. Step 2: Recall historical economic data and studies from the early 2000s in the United States, focusing on trends in income shares among different income groups (e.g., top earners, middle class, lower income).
3. Step 3: Analyze reports and statistics from credible sources such as the U.S. Census Bureau or economic research institutions that track income shares over time, noting changes in the proportion of total income received by the top earners versus other groups.
4. Step 4: Compare the income growth rates of different groups during the early 2000s, paying attention to whether the top earners' income grew faster than that of the middle class or lower-income groups.
5. Step 5: Conclude that during the early 2000s, income inequality increased in the United States, with a larger share of income going to the top earners, based on the observed data and trends.