The Greater the Area Between the Lorenz Curve and the Diagonal

question 138

Multiple Choice

The greater the area between the Lorenz curve and the diagonal in the Lorenz curve diagram, the

• A)smaller is the Gini ratio and the greater is the degree of income inequality.
• B)larger is the Gini ratio and the greater is the degree of income inequality.
• C)smaller is the Gini ratio and the lesser is the degree of income inequality.
• D)larger is the Gini ratio and the lesser is the degree of income inequality.

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Definitions:

Long-Term Financial Risk

The possibility of experiencing financial losses or failures that arise over an extended period, often due to changes in market conditions, interest rates, or other economic factors.

Short-Term Financial Risk

The risk associated with the need to meet financial obligations in the near term, often within one year.

Canadian Short-Term Interest Rates

The interest rates applied to short-term financial instruments in Canada, typically with maturities of less than one year.

Bank Of Canada

The central bank of Canada, responsible for the country's monetary policy, issuing currency, and acting as the government's banker.