Today, the Gini Coefficient of Income Inequality for the United

question 69

Multiple Choice

Today, the Gini coefficient of income inequality for the United States is about .5. In 1975, it had been about .4. What do these numbers tell us?

• A) Wealth is distributed less equally than income.
• B) The number of rich people has fallen.
• C) Income has become more unequally distributed.
• D) The official definition of poverty has changed.

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Definitions:

Production Synergies

The cost-saving or performance-enhancing effects achieved when two or more entities (e.g., companies or departments) combine their production efforts.

Diversify Risk

The strategy of spreading investments across various financial instruments, industries, or other categories to reduce risk.

Synergies

The additional value created by combining two companies or entities, often realized through cost savings, increased revenues, or enhancements in productivity.

Cost of Equity

The return a company theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertake by investing their capital.