What does the Gini coefficient represent?

Multiple choice question for Income Inequality. Select an option, then review the explanation below.

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The ratio comparing the share of total income earned by the richest 20% of households to that earned by the poorest 20%The most frequently used graphical method to display income distributionA popular metric used to quantify income inequality levelsA standard indicator measuring the extent of unfairness in income allocation

Explanation

Option A correctly defines the Gini coefficient as the ratio of the income share of the top 20% of families to that of the bottom 20%. Options B, C, and D describe related concepts but do not accurately define the Gini coefficient.

Practice related questions from the same subject.

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3.When a tax can be transferred, what determines the actual burden of the tax?
4.What does tax incidence refer to?
5.What does a progressive income tax system imply about the tax rate for individuals with higher earnings?

What does the Gini coefficient represent?

Explanation

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