Which of the following is true with respect to the Lorenz curve and Gini ratios?
ID: 1113749 • Letter: W
Question
Which of the following is true with respect to the Lorenz curve and Gini ratios?
The Lorenz curve is a graphical representation of a country s inflation rate.
A Gini ratio of .99 is getting close to a perfectly equal distribution of income.
A Gini ratio has a value that falls between 0 and 1.
The Lorenz curve and Gini ratio are unrelated.
Dr. Wunder made up the terms Lorenz curve and Gini ratio. (hint this is a wrong answer)
The Lorenz curve is a graphical representation of a country s inflation rate.
A Gini ratio of .99 is getting close to a perfectly equal distribution of income.
A Gini ratio has a value that falls between 0 and 1.
The Lorenz curve and Gini ratio are unrelated.
Dr. Wunder made up the terms Lorenz curve and Gini ratio. (hint this is a wrong answer)
Explanation / Answer
The correct answer is C. The amount by which the Lorenz curve sinks below the line of equality is given by the Gini coefficient and the ratio lies between 0 and 1. The correct answer is C.
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