Question

The closer the Lorenz curve is to the diagonal, the greater is the degree of income...

The closer the Lorenz curve is to the diagonal, the greater is the degree of income inequality.

Select one:

True

False

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Answer #1

The Lorenz curve can be defined as the graphical representation of the distribution of income. In this curve the cumulative percentage of income is plotted against the cumulative percentage of population. If the Lorenz curve is farther from line of equality, the income inequality will be high and vice-versa.

Hence it can be said that the closer the Lorenz curve is to the diagonal, the lower is the degree of income inequality.

Hence the given statement is false.

Hence option False is the correct answer.

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