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If people’s income of a country is denoted in a curved line space that it has increased, then what does it denote?
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- the income is increasing
- the income is decreasing
- dissimilarity is decreasing in income distribution
- dissimilarity in income distribution is increasing
- the income is increasing
Correct Option: C
It shows inequality in income distribution. Inequality indices can also be derived directly from the Lorenz curve. Perhaps the most commonly-used inequality index is the Gini coefficient, which ranges from 0 (perfect equality) to 1 (perfect inequality). It is the ratio of the area enclosed by the Lorenz curve and the perfect equality line to the total area below that line.
