Multiple Choice
The Gini ratio is a numerical measure of the overall level of income ______ in the economy.
16. Income Inequality and Poverty
Lorenz Curve and Gini Coefficient
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Which of the following Gini coefficients indicates the lowest degree of income inequality?
A
0.60
B
0.10
C
0.85
D
0.35
Verified step by step guidance1
Understand that the Gini coefficient is a measure of income inequality within a population, ranging from 0 to 1, where 0 represents perfect equality (everyone has the same income) and 1 represents perfect inequality (one person has all the income).
Identify the given Gini coefficients: 0.60, 0.10, 0.85, and 0.35.
Recall that a lower Gini coefficient means less income inequality, so among the given values, the smallest number corresponds to the lowest degree of inequality.
Compare the values numerically to find the smallest Gini coefficient.
Conclude that the Gini coefficient with the lowest value indicates the lowest degree of income inequality.
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