Q. “Lorenz curve” is associated with which of the following?

[A] Unemployment

[B] Inflation

[C] Inequality

[D] Climate Change

Answer: C

A graph showing the degree of inequality in income and wealth in a given population or an economy.  

  • It is a rigorous way to measure income inequality. In this method (for example), personal incomes in an economy are arranged in increasing order; the cumulative share of total income is then plotted against the cumulative share of the population.  
  • The curve’s slope is thus proportional to per capita income at each point of the population distribution.  
  • In the case of complete equality of income, the lorenz curve will be a straight line and with greater curvature the inequality rises proportionally–the Gini Coefficient measures this inequality. 

Source: TMH Ramesh Singh