The Difference Between the 45-Degree Line and the Lorenz Curve

question 100

Multiple Choice

The difference between the 45-degree line and the Lorenz curve shows the:

• A) inflationary gap.
• B) recessionary gap.
• C) number of households that are classified as being poor.
• D) degree of income inequality.

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Definitions:

Pension Expense

The cost recognized in an accounting period related to the company's pension plan.

Defined Contribution Pension Plan

A type of retirement plan where an employer, employee, or both make contributions and the final payout depends on the plan's investment performance.

Pension Fund

A pool of assets forming an independent legal entity that is used to fund pension plan benefits promised to employees upon retirement.

Periodic Pension Expense

The expense recognized in an accounting period related to employer-sponsored pension plans, reflecting service cost, interest cost, expected return on plan assets, and amortization.