-The Above Figure Shows Two Lorenz Curves

question 217

Multiple Choice

-The above figure shows two Lorenz curves. Lorenz curve A shows the distribution of income and Lorenz curve B shows the distribution of wealth. Which statement below is correct?

• A) The Lorenz curve for wealth shows that wealth is distributed less equally because wealth does not include human capital.
• B) The Lorenz curve for income shows that income is distributed less equally because income does not include income from stocks and bonds.
• C) The Lorenz curves show wealth is greater than income.
• D) The Lorenz curves show income is greater than wealth.

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Definitions:

Financial Account

A component of the balance of payments that records transactions involving financial assets and liabilities between residents of a country and non-residents.

Oil Imported

The total volume of crude oil and petroleum products that a country acquires from foreign sources to meet its energy and fuel needs.

Dividends

Payments by a corporation of all or part of its profit to its stockholders (the corporate owners).

Direct Investment

Describes the process of acquiring a controlling interest in foreign assets, such as a company or property, with the aim of managing the investment directly.