Some Economists Criticize the Lorenz Curve Because It

question 30

Multiple Choice

Some economists criticize the Lorenz curve because it

• A) includes too many things in measuring income, such as food stamps, housing aid, and other government programs.
• B) does not account for the effect of age on a family's income.
• C) measures unreported income earned in the underground economy.
• D) uses after-tax income when pre-tax income is more appropriate.

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Definitions:

Top-Down

A management style or approach where decisions are made at the highest levels of the organization and then transmitted down the hierarchy.

Linear Model

A representation or approach that assumes a straight-line relationship between variables, often used in statistics and forecasting.

Hierarchical Level

A ranking system within an organization where positions are placed in levels of importance and authority from the highest to the lowest.

Compensation Level

The relative amount of payment or reward that an employee receives for doing their job, including wages, salaries, bonuses, and benefits.