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:

Budgeted Income Statement

A financial report projecting revenue, expenses, and net income for a future period, based on management's expectations.

Budgeted Balance Sheet

A financial statement that projects the financial position of a company at a future date, showing expected assets, liabilities, and equity based on planned operations and initiatives.

Continuous Budget

A rolling budget for a 12-month period where the budget moves forward one month (or another period) as the current month (or period) is completed.

Perpetual Budget

A continuously updated budget that adjusts and rolls over to subsequent periods as the financial year progresses.