A Lorenz curve shows the
A) level of a country's income relative to its productive capacity.
B) level of a country's income relative to its foreign trade.
C) ratio of workers' income to capitalists' income.
D) degree of inequality across households in the distribution of income.
E) functional distribution of income.

Question

Quizplus · Accepted Answer

A Lorenz curve measures the degree of income inequality in a society by comparing the cumulative income earned by different income groups (from lowest to highest) with the cumulative population of each group. The further the Lorenz curve is from the line of perfect equality (a 45-degree line from origin to maximum possible income), the greater the degree of income inequality in the society.

A Lorenz Curve Shows the