Figure 333 Illustrates Lorenz Curves for Four Different Economies

question 63

Multiple Choice

Figure 33.3 illustrates Lorenz curves for four different economies. For which economy would the lowest 20 percent of families receive the smallest share of total income?

• A)A.
• B)B.
• C)C.
• D)D.

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Definitions:

Return on Equity

A measure of a corporation's profitability, calculated by dividing net income by shareholder equity, indicating how effectively equity is utilized to generate profits.

Return on Assets

A financial ratio indicating the profitability of a company relative to its total assets, measuring how efficiently assets generate profits.

Fixed Asset Turnover

A financial ratio that measures how efficiently a company uses its fixed assets to generate sales.

Du Pont Identity

A financial formula that breaks down return on equity into three component parts: profit margin, asset turnover, and financial leverage.