If the Area Between the Line of Equality and the Lorenz

question 80

Multiple Choice

If the area between the line of equality and the Lorenz curve is 1,000, and the entire area beneath the line of equality is 5,000, the Gini ratio is

• A) 0.8
• B) 0.1
• C) 0.2
• D) 0.5

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Definitions:

Government Expenditures

The total amount of money spent by the government in a given period, including spending on goods and services, social programs, and public projects.

Keynesian Analysis

An economic theory that emphasizes the role government policies and spending should play in stabilizing the economy, maintaining low unemployment, and controlling inflation.

Aggregate Demand

The total demand for goods and services within a particular market.

Tax Cut

A reduction in the amount of taxes imposed by a government on its citizens.