Q. Which of the following statements correctly defines a Lorenz Curve?

[A] statistical measure of inequality that describes how equal or unequal income or wealth is distributed among the population of a country.

[B] A graphical distribution of wealth, showing the proportion of income earned by any given percentage of the population.

[C] if tax rates are increased above a certain level, then tax revenues can actually fall because higher tax rates discourage people from working.

[D] hypothesis that economic growth initially leads to greater inequality, followed later by the reduction of inequality.

Answer: B
Notes:
  • Lorenz Curve was developed by Max O. Lorenz in 1905 for representing wealth distribution. 
  • It shows the cumulative share of income from different sections of the population. 

SourceArticle 

Blog
Academy
Community