economics medium True/False

If the Lorenz curve is perfectly straight and diagonal, it indicates high income inequality in the economy.

  1. True
  2. False

Answer: False

The line of perfect equality is a 45-degree diagonal line on the Lorenz curve graph. If the actual Lorenz curve perfectly overlaps this diagonal line, it means income is distributed absolutely equally among the population. The further the curve bows away from the diagonal, the higher the inequality.

Topic Macroeconomics - Inequality
Exam Relevance UPSC, SSC, Banking
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