If the Lorenz Curve for Income Moves Upward Toward the 45°

question 141

Multiple Choice

If the Lorenz curve for income moves upward toward the 45° line,then the

• A) distribution of income has become more unequal.
• B) distribution of income has become more equal.
• C) mean (average) household income increased.
• D) total household income increased.
• E) total household income decreased.

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Definitions:

Income-Sharing Ratio

The predetermined agreement on how profits or losses will be distributed among partners or stakeholders in a business arrangement.

Capital Deficiency

A financial state where a company's liabilities exceed its assets, indicating financial distress.

Distribution of Cash

The allocation or disbursement of cash funds by a business to its stakeholders or for operational purposes.

Income Ratio

A metric that compares various components of income, such as net income to revenue, to assess a company's financial health.