Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 20 - Part VI - Income Inequality and Poverty - Problems and Applications - Page 431: 5

Answer

a) The 'leaks in the bucket' are caused by people lying to cheat the system and the administrative costs of redistributing the money.

Work Step by Step

b) Republicans usually think that the bucket is leakier. Thus, this belief makes Republicans think there should be less of a redistribution of income (than Democrats).
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