The Gini Ratio

question 2

Multiple Choice

The Gini ratio

• A) measures the relative extent of poverty in a nation.
• B) compares the income of persons, households, or households at the 90th percentile of the income distribution to the income at the 10th percentile.
• C) is a numerical measure of the overall dispersion of income in a nation.
• D) is found by dividing the entire area below and to the right of the diagonal in the Lorenz diagram by the area between the diagonal and Lorenz curve.

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Definitions:

Financial Crisis

A situation where financial assets suddenly lose a large part of their nominal value, often leading to bankruptcies and economic downturns.

Phillips Curve

An economic concept illustrating an inverse relationship between the level of unemployment and the rate of inflation.

Inflation Rate

The percentage rate of increase in price levels over time, which can erode purchasing power.

Inflation Expectations

The rate at which people expect the prices of goods and services to increase in the future, which can influence economic behavior.