The Lorenz Curve Is Criticized for All of the Following

question 52

Multiple Choice

The Lorenz curve is criticized for all of the following EXCEPT

• A) that it excludes transfers-in-kind income.
• B) that it does not account for the size differences of households.
• C) that it does not account for age differences of households.
• D) that it does not account for the impact of trade on the standard of living.

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Definitions:

Good

An item or product that is produced and consumed to satisfy human wants or needs.

Proportional

An attribute of a relationship where changes in one variable are associated with consistent, proportional changes in another variable.

Flat Tax Structure

A tax system with a constant marginal rate, usually applied to individual or corporate income.

Percentage

A ratio or fraction out of 100 that is used to express how large one quantity is relative to another quantity.