Discussion
The Lorenz curve is a measure of
Answer: B
The Lorenz curve is a measure of income inequalities.
It plots the cumulative share of income (or wealth) received against the cumulative share of the population, ranked from poorest to richest. If income were shared equally the curve would be the 45-degree line of equality; the further it sags below that line, the greater the inequality. The Gini coefficient is derived from the area between the two.
Poverty is measured by poverty lines and head-count ratios, inflation by price indices such as the WPI and CPI, and a tax structure is described by rates and incidence. None of them is what a Lorenz curve shows.
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