Multiple Choice
Which of the following is true regarding the Gini coefficient?
16. Income Inequality and Poverty
Lorenz Curve and Gini Coefficient
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The Gini ratio is a numerical measure of the overall level of income ______ in the economy.
A
growth
B
mobility
C
taxation
D
inequality
Verified step by step guidance1
Understand that the Gini ratio (or Gini coefficient) is a measure used in economics to quantify income inequality within a population.
Recall that the Gini ratio ranges 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).
Recognize that the Gini ratio does not measure growth, mobility, or taxation directly, but rather the distribution of income across individuals or households.
Identify that the missing word in the sentence is 'inequality' because the Gini ratio specifically measures the overall level of income inequality in the economy.
Conclude that the correct completion of the sentence is: 'The Gini ratio is a numerical measure of the overall level of income inequality in the economy.'
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