ECONOMICS
INCOME DISTRIBUTION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -The answer is a. Income inequality has increased steadily in the U.S. since 1970.
Detailed explanation-2: -The closer the Lorenz curve is to the diagonal, the greater is the degree of income inequality. In the United States since 1970, the poor have gotten poorer and the rich have gotten richer in both relative and absolute terms. The U.S. poverty rate was considerably lower in 2008 than in 1960.
Detailed explanation-3: -A Gini coefficient of zero means there is an equal distribution of income, whereas a number closer to one indicates greater inequality. The lower the Gini coefficient, the more equal the society is said to be.
Detailed explanation-4: -The Gini coefficient ranges from 0, indicating perfect equality (where everyone receives an equal share), to 1, perfect inequality (where only one recipient or group of recipients receives all the income).