All but which one of the following statements about the Gini coefficient is true?
A)The Gini coefficient reflects the data shown in the Lorenz curve.
B)The Gini coefficient equals zero when there is perfect equality.
C)The Gini coefficient increases as income inequality increases.
D)The Gini coefficient must fall when the amount of income in an economy increases.
E)The Gini coefficient equals one when there is perfect inequality.

Question

Quizplus · Accepted Answer

The Gini coefficient can increase or decrease with changes in the amount of income in an economy, depending on how that income is distributed among households. Therefore, statement D is false. Statements A, B, and E are true, and statement C is generally true, but not always, as there are some cases where income inequality can increase without a corresponding increase in the Gini coefficient, such as when the income of the richest households increases faster than the income of the poorest households, but the income gap between the two groups remains the same.

All but Which One of the Following Statements About the Gini