Asked by Hikkmatjit Saini on May 11, 2024
Verified
The Gini ratio is calculated by dividing the area between the Lorenz curve and the diagonal by the
A) remaining area below the diagonal.
B) total area below the diagonal.
C) total area of the box or rectangle.
D) remaining area of the box or rectangle.
Gini Ratio
An indicator of the level of income distribution unevenness in a society, ranging from 0, which implies equal income for all, to 1, indicating one person possesses all the wealth.
Lorenz Curve
A graphical representation used to show the distribution of income or wealth within a society.
- Distinguish between various measures of income inequality, including the Gini ratio and the Lorenz curve.
Verified Answer
NN
Nattasha NeherMay 12, 2024
Final Answer :
B
Explanation :
The Gini ratio is calculated by dividing the area between the Lorenz curve and the diagonal by the total area below the diagonal, which measures income inequality within a population.
Learning Objectives
- Distinguish between various measures of income inequality, including the Gini ratio and the Lorenz curve.