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Suppose that you observe that income inequality in Country A is higher than income inequality in the United States. Suppose y
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Answer #1

This evidence is for Roy Mode. Roy Model suggests that the choice of a particular skill depends on the distribution of skills, the correlation between these skills in the population. As the people in Country A have lower skill levels than people in the United States, so the selection of skills and distribution of income depends only on the skills in a particular country. As the people in US are more skilled so they earn higher income, compared to people in Country A who are low skilled and thus earn low income.

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