The Gini ratio:
A. measures the relative extent of poverty in a nation.
B. compares the income of persons, households, or households at the 90 th percentile of the
income distribution to the income at the 10 th percentile.
C. is a numerical measure of the overall dispersion of income in a nation.
D. is found by dividing the entire area below and to the right of the diagonal in the Lorenz
diagram by the area between the diagonal and Lorenz curve.
Answer: C
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Criteria for an optimum currency area include all the following except
A) fiscal transfers. B) similar business cycle patterns. C) extensive trade with each other. D) a common language.
The time span between recognition of the need for a policy change and the legislation being signed into a law is known as: a. signal lag
b. implementation lag. c. impact lag. d. recognition lag.
The marginal cost of a dollar of loanable funds is not
a. the interest rate b. the same as the marginal physical product of capital c. a measure of the marginal cost of capital d. equal to the marginal revenue product of capital at the firm's profit-maximizing quantity of loanable funds e. the change in a firm's total cost that results from adding one more dollar of loanable funds to production
Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?
a. a more efficient allocation of resources b. a distortion of incentives c. unchanged behavior d. All of the above are correct.