Economics • Economic BasicsEasy
What is measured by the Gini Coefficient derived from the Lorenz Curve?
A. The rate of inflation in an economy
B. The degree of income or wealth inequality✓ Correct Answer
C. The elasticity of demand for essential goods
D. The trade balance between two countries
💡 Solution & Explanation
The Gini coefficient is a statistical measure derived from the Lorenz Curve that quantifies the degree of income or wealth inequality within a population, ranging from zero representing absolute equality to one representing total inequality. Inflation is measured through consumer or wholesale price indices rather than distributional curves, and demand elasticity concerns price sensitivity rather than societal resource dispersion. A lower Gini coefficient indicates a more egalitarian distribution of resources in the national economy.
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