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A. The Gini ratio is:

a. the area between the diagonal line and the Lorenz curve divided by the total area below the diagonal line.
b. the sum of the income shares for the middle quintiles divided by the income shares of the other quintiles.
c. the area between the diagonal line and the Lorenz curve.
d. the fraction of income earned by the quintile with the largest income share.

B. The Gini ratio cannot exceed 1 because:

a. a perfectly unequal income distribution will have a Gini ratio of 1.
b. the line of equality does not move.
c. the Lorenz curve can change.
d. a perfectly equal income distribution will have a Gini ratio of 1.

C. If the Gini ratio declines from 0.42 to 0.35, income has become:

a. more equal.
b. less equal.
c. more dispersed.
d. less dispersed.

D. If income becomes more unequal, the Lorenz curve will:

a. move closer to the diagonal line.
b. bow further away from the diagonal line.
c. have a slope closer to 1.
d. intersect the diagonal line.

Respuesta :

Emhicee

Answer:

A. (a, the area between the diagonal line and the lorenz curve divided by the total area below the diagonal line)

B. (a, a perfectly unequal income distribution will have a Gini ration of 1.)

C. (a, more equal)

Explanation:

A. Gini ratio can be defined as the statistical determination of the wealth and income distribution among a country's populace.

It can also be called Gini coefficient or Gini index, and it is a measure of the inequality in income and wealth distribution.

The Gini ration is calculated by finding the difference between the Lorenz curve and the uniform distribution line, then divided by the total area under the uniform distribution line. A Gini ration of <0.2 is the perfect income equality.

B. Gini ratio cannot exceed 1 because a perfectly unequal income distribution will have a Gini ratio of 1. This means that the line of equality does not move irrespective of whether or not the Lorenz curve changes.

C. If the Gini ratio declines from 0.42 to 0.35, then that means that income has become more equal. Note that a Gini ratio of <0.2 signifies a perfect income distribution, slightly greater than 0.2 to ).35 signifies that income distribution is close to equality.

Cheers.

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