Which of the following correctly describes the Lorenz curve?
a. The Lorenz curve shows that the increasing income inequality in the U.S. society is actually good for the economy.
b. The Lorenz curve shows the growth rate in real median family income over time.
c. The Lorenz curve shows the cumulative distribution of family income, ranked from the poorest to the richest families, and compares that curve with the straight line indicating perfectly equal income distribution.
d. The Lorenz curve shows the cumulative distribution of family income, ranked from the richest to the poorest families, and compares that curve with the ideal of having all income go to the richest 5 percent of society.
c
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Negative externalities might be reduced by letting people "work it out themselves," which might also be described as ________
A) substantiation. B) negotiation C) remuneration D) adjudication E) appropriate taxation
Suppose Dunkin' Donuts buys coffee beans from a wholesaler for $1. They package the beans up and sell them as their own "Dunkin' Donut" beans for $10 at their store. How much value is added to the economy?
A) $10 B) $11 C) $13 D) $15