How can the degree of income inequality be shown by a Lorenz curve?
What will be an ideal response?
In a Lorenz curve, the percentage of households is plotted on the horizontal axis and the percentage of income is plotted on the vertical axis. The diagonal line between the two axes represents a perfectly equal distribution of income. A Lorenz curve that is bowed to the right from the diagonal shows income inequality.
You might also like to view...
Most cultural theories of poverty assert that the poor lack sufficient desire and motivation to escape poverty
Indicate whether the statement is true or false
If you and your friends receive many good job offers upon graduation, but the paychecks you all receive, although attractive, seem to buy fewer and fewer goods each month, you're probably living in the business cycle phase of
a. recession b. downturn c. boom or prosperity d. recovery e. trough