What Is a Lorenz Curve? How Can It Be Used

question 102

Essay

What is a Lorenz curve? How can it be used to show the degree of inequality of income distribution? Given the data for Brazil shown, draw on the graph provided a Lorenz curve. Is the income distribution relatively equal or unequal? Explain how you reached your answer.

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Definitions:

Future Value

The value of an investment or loan at a specific future date, considering interest or return earned over time.

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.

Future Value

The estimated value of an investment at a specific date in the future, considering interest or growth over time.

Compounded Semiannually

Refers to the process where interest is calculated and added to the principal amount of an investment or loan twice a year.