A country's Gini coefficient has increased over time. Which one of the following scenarios can be inferred from this? |ForumIAS

Q. A country’s Gini coefficient has increased over time. Which one of the following scenarios can be inferred from this?

[A] The income gap between the rich and the poor has narrowed.

[B] The overall standard of living has improved for everyone.

[C] The distribution of income has become more unequal.

[D] The economy is experiencing a recession.

Answer: C

Notes:

Explanation – The Gini coefficient is a commonly used measure of income inequality, with higher values indicating greater inequality. If a country’s Gini coefficient has increased over time, it implies that the gap between the rich and poor has widened, meaning that the distribution of income has become more unequal. The coefficient ranges from 0 (0%) to 1 (100%), 0 representing perfect equality and 1 representing perfect inequality. Higher the value of Gini coefficient, higher the inequality.

Source: Forum IAS

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