What are the major criticisms of the Lorenz curve?
What will be an ideal response?
The Lorenz curve typically is presented in terms of the distribution of money income and ignores income in kind. It also does not account for differences in family sizes, the number of income earners in the family, or the ages of the families. The Lorenz curve also reflects income before taxes rather than disposable income, and fails to measure income from the underground economy.
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Keynesians believe ________
A) that economies move quickly to their long run equilibrium levels B) that the government should pursue active policies to stabilize economic fluctuations C) that the long run is more important than short-run fluctuations D) all of the above E) none of the above
Regarding unemployment, the classical model implies that
A) unemployment always exists. B) unemployment cannot exist. C) voluntary unemployment is zero, but involuntary unemployment often is fairly high. D) only voluntary unemployment exists.