A graph showing the degree of inequality in income and wealth in a given population or an economy nd...........

Economic Affairs Development and Indicators

A graph showing the degree of inequality in income and wealth in a given population or an economy – describes which of the following?

Laffer Curve

Lorenz Curve

Phillips Curve

Kuznets Curve

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Explanation:

Why Is the Lorenz Curve Important?

The Lorenz curve is important because it represents one of the best and simplest ways to illustrate the level of economic inequality in society

How Does the Lorenz Curve Measure Inequality?

The Lorenz curve is a graphical representation of the distribution of income or wealth in a society. Basically, the farther the curve moves from the baseline, represented by the straight diagonal line, the higher the level of inequality.

How Do You Calculate the Gini Coefficient Using the Lorenz Curve?

The Gini coefficient is used to express the extent of inequality in a single figure. It is equal to the area below the line of perfect equality (0.5 by definition) minus the area below the Lorenz curve, divided by the area below the line of perfect equality. The coefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality.