Question:
The Lorenz Curve is used to measure which of the following?
(1) The ratio of income to wealth in different countries
(2) The ratio of public goods to private goods in different countries
(3) The ratio of income inequality to income equality in different countries
(4) The ratio of the highest to lowest percentage of income receivers of a country
(5) The ratio of non-working age population to the working-age population
Correct Answer:
(3)
Answer Explanation:
The Lorenz curve is a graphical representation of income distribution. While technically a curve, in the context of multiple-choice exams, it is closely associated with measuring the degree of income inequality (often expressed as the Gini ratio/coefficient, which is mathematically derived directly from the Lorenz curve).
Topic: Inequality Year: 2020
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