Which of the Following Correctly Describes the Lorenz Curve? ​

question 44

Multiple Choice

Which of the following correctly describes the Lorenz curve? ​

• A) ​The Lorenz curve shows that the increasing income inequality in the U.S. society is actually good for the economy.
• B)  The Lorenz curve shows the growth rate in real median family income over time.
• C) ​The Lorenz curve shows the cumulative distribution of family income, ranked from the poorest to the richest families, and compares that curve with the straight line indicating perfectly equal income distribution.
• D) ​The Lorenz curve shows the cumulative distribution of family income, ranked from the richest to the poorest families, and compares that curve with the ideal of having all income go to the richest 5 percent of society.

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Definitions:

Corporate Securities

Financial instruments issued by corporations, including stocks and bonds, representing ownership or debt obligations.

Issue Securities

The process by which corporations, governments, or other entities raise capital by distributing financial instruments, including stocks and bonds, to investors.

Issues Opinions

Refers to the practice of legal bodies or officials, like courts, issuing formal judgments or explanations for their decisions on cases.

Independent Agency

An independent agency refers to a governmental body that operates outside of the direct control of the executive, legislative, or judicial branches, typically established to regulate specific activities or interests.