Question : Lorenz curve shows:
Option 1: Inflation
Option 2: Unemployment
Option 3: Income distribution
Option 4: Poverty
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Correct Answer: Income distribution
Solution : The correct answer is Income distribution .
Percentiles of the population are plotted on Lorenz curves along with the total wealth or income of those who fall within that percentile, or above it. The Lorenz curve illustrates how unequally people are paid in a given economy or population. The Lorenz curve's derived Gini coefficient is the most commonly used indicator of income inequality in a society.
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