If Income Were Distributed Equally in This Country,the Lorenz Curve

question 10

Multiple Choice

If income were distributed equally in this country,the Lorenz curve would be:

• A)A diagonal line rising from left to right.
• B)A horizontal line.
• C)A vertical line.
• D)A diagonal line decreasing from left to right.

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Definitions:

Share Issuance

The process by which a company distributes new shares to investors, thereby raising capital.

Market Price

The current price at which an asset or service can be bought or sold.

Fair Market Value

The price at which an asset would be exchanged between a willing buyer and seller, each having reasonable knowledge of all the relevant facts.

Fair Value Enterprise Method

A valuation technique that estimates the price at which an entire business would change hands, reflecting the present value of future earnings.