What Does a Lorenz Curve Illustrate

question 93

Multiple Choice

What does a Lorenz curve illustrate?

• A)a comparison of the distribution of income in two different countries
• B)the distribution of income within a country in a given time period
• C)the share of taxes paid by different groups of households
• D)the change over time in the percentage of households with incomes that place them below the poverty line

---

Definitions:

Discount Rate

The discount rate applied in the evaluation of the present value of future cash flows in discounted cash flow analysis.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Cash Inflows

The total amount of money being received by a company, usually from its operations, investments, or financings.

Depreciation Expense

Refers to the allocation of the cost of a tangible asset over its useful life.