Question

After a revolution in a country with exceptionally high income inequality, a government institutes an extreme income transfer program from wealthy families to impoverished ones. How is this represented in the Lorenz curve?

Answer 1

Answer:

Explanation:

Movement from D to C.

Lorenz curve is a curve used to depicts how income is been distributed within an economy, it also shows the progressive share of income within various segment of the population. Lorenz curve was originated by an American Economist called Max O Lorenz in 1905.

Answer 2

The policy that institutes an extreme income transfer program from wealthy families to impoverished ones will be represented in the Lorenz curve as Movement D to C.

What is the Lorenz curve?

The Lorenz curve is a way of depicting how income is distributed within an economy,

Also, its shows the progressive share of income within various segment of the population.

The farther the curve moves from the baseline, the higher the level of inequality.

Read more about Lorenz curve

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