Question

"If a large portion of the total income in concentrated in the hand of few people, Average income fails to reflect distribution of income". How?​

Answer 1

Answer:

Among the rich, it  could see them accumulate savings, which banks can then lend  out, so increasing investment in the economy. Or, the rich may use  their economic power to lobby against policies that don’t serve their

needs, for example investment in public health and education.

If there are large numbers of poor people, economic  growth may be affected by their inability to invest in education  and their lower health levels, among other factors.