If the Area Between the Diagonal Line of Absolute Equality

question 121

Multiple Choice

If the area between the diagonal line of absolute equality and the Lorenz curve is greater for the United States than for Japan,we can conclude that the

• A)Distribution of income in Japan is closer to being equal than in the United States.
• B)Distribution of income in Japan is as equal as in the United States.
• C)Distribution of income in Japan is less equal than in the United States.
• D)Relative distributions of income in the two countries are the same.

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Definitions:

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, resulting in a net profit or loss.

Statement of Retained Earnings

A financial statement that shows how a company's retained earnings have changed over a given period due to profits retained in the business or dividends distributed.

Adjusted Trial Balance

A trial balance that accounts for all adjustments made in the accounting period, used for preparing financial statements.

General Ledger Accounts

The complete record of all financial transactions over the life of a company, organized by account.