True. the Lorenz curve and the line of perfect income equality will be one and the same in an economy if 20% of all households receive 20% of all income.
The Lorenz curve in economics is a graphical depiction of the distribution of wealth or income. Max O. Lorenz created it in 1905 to symbolize the unequal distribution of wealth.
An illustration of income or wealth inequality on a graph is a Lorenz curve. According to income or wealth, the horizontal axis of the graph represents percentiles of the population.
A graphical representation of the wealth distribution in a community is the Lorenz curve. The inequality increases with the curve's distance from the bisector. The most commonly used indicator of income disparity in a community is the Gini coefficient, which was calculated from the Lorenz curve.
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