The Farther the Lorenz Curve Bows Down Away from the Line

question 127

Multiple Choice

The farther the Lorenz curve bows down away from the line of income equality, the

• A)greater the inequality of the distribution of income.
• B)more even the income distribution.
• C)more proportional the income distribution.
• D)less likely the economy is to maintain its equilibrium.
• E)greater the need for redistributive taxation.

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Definitions:

Voting Rights

The rights possessed by shareholders that allow them to vote on matters of corporate policy, including decisions on the composition of the board of directors.

Market Return

The total return from an investment or portfolio, including dividends and capital gains, as compared to the overall market.

Constant Growth Stock

A stock whose dividends are expected to grow at a constant rate indefinitely.

Stock Value

The financial worth of a company's shares, determined by market conditions, company performance, and investor demand.