Question

Economics Semester Exam
31 of 3131 of 31 Items




Question
Country A has a greater measured income inequality than Country B. Which of the following statements describes the Gini coefficients of both countries?(1 point)
Responses

Country A has a Gini coefficient of 93% and Country B has a Gini coefficient of -12%.
Country A has a Gini coefficient of 93% and Country B has a Gini coefficient of -12%.

Country A has a Gini coefficient of 25% and Country B has a Gini coefficient of 74%.
Country A has a Gini coefficient of 25% and Country B has a Gini coefficient of 74%.

Country A has a Gini coefficient of 82% and Country B has a Gini coefficient of 38%.
Country A has a Gini coefficient of 82% and Country B has a Gini coefficient of 38%.

Country A has a Gini coefficient of 122% and Country B has a Gini coefficient of 93%.

Answer 1

To determine the correct statements regarding the Gini coefficients of Country A and Country B, we need to know a few key facts about the Gini coefficient:

1. The Gini coefficient ranges from 0% to 100% (or 0 to 1), where 0% indicates perfect equality (everyone has the same income) and 100% indicates perfect inequality (one person has all the income).

Given these facts, let’s analyze the responses:

1. **Country A has a Gini coefficient of 93% and Country B has a Gini coefficient of -12%.**
- A Gini coefficient cannot be negative. Therefore, this option is invalid.

2. **Country A has a Gini coefficient of 25% and Country B has a Gini coefficient of 74%.**
- This option states that Country A is more equal (lower Gini) than Country B (higher Gini), which means Country A does not have greater income inequality than Country B. This option is invalid.

3. **Country A has a Gini coefficient of 82% and Country B has a Gini coefficient of 38%.**
- Here, Country A (82%) has greater measured income inequality than Country B (38%), which is consistent with the question. This option could be valid.

4. **Country A has a Gini coefficient of 122% and Country B has a Gini coefficient of 93%.**
- A Gini coefficient cannot exceed 100%. Therefore, this option is invalid.

Based on this analysis, the correct answer that describes the Gini coefficients of both countries is:

**Country A has a Gini coefficient of 82% and Country B has a Gini coefficient of 38%.**