Economics • Economic BasicsEasy
What is measured by the 'Gini Coefficient'?
A. The rate of inflation in an emerging market economy.
B. The degree of income or wealth inequality within a nation.✓ Correct Answer
C. The openness of an economy to international trade and capital flows.
D. The proportion of the labor force that is unemployed.
💡 Solution & Explanation
The Gini coefficient is a standard statistical measure of economic inequality ranging between zero and one, where zero represents absolute income equality and one represents total inequality. Inflation rates and unemployment figures are tracked using entirely separate macroeconomic indicators such as the Consumer Price Index and periodic labor force surveys. Economists frequently plot this data using the Lorenz curve to visually represent wealth distribution across populations.
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