The difference between the 45-degree line and the Lorenz curve shows the degree of income inequality. The 45-degree line represents perfect equality where everyone has the same income, while the Lorenz curve represents the actual distribution of income in a population. The area between the two curves reflects the extent of income inequality within that population.
The difference between the 45-degree line and the Lorenz curve shows the:
inflationary gap.
recessionary gap.
number of households that are classified as being poor.
degree of income inequality.
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