The Gini coefficient Which of the following statements about the Gini coefficien

Question

The Gini coefficient Which of the following statements about the Gini coefficient is true? Check all that apply. The Gini coefficient is based on how disparately income is distributed across the quintiles. The United States has very low value of the Gini coefficient and is close to those in European countries. A country with a perfectly equal distribution of income would have a Gini coefficient of 0. The Gini coefficient measures a country's economic insecurity. If all a country's income went to just one person, the Gini coefficient would be 0. Suppose that Spain has a Gini coefficient of 0.5, France has a Gini coefficient of 0.4, and Germany has a Gini coefficient of 0.3. Based on this information, which of the following statements about income inequality in the three countries are correct? Check all that apply. Spain has a higher degree of income inequality than France or Germany. The lowest quintile of France's income distribution earns a lower percentage of the aggregate French income than the lowest quintile of Germany's income distribution does of the aggregate German income. France has a higher degree of income inequality than Spain but lower than Germany. The ratio of the total income of the lowest quintile of income distribution to the total income of the highest quintile of income distribution is higher in Spain than in Germany. The lowest quintile of Spain's income distribution earns a lower percentage of the aggregate Spanish income than the lowest quintile of France's income distribution does of the aggregate French income.

Explanation / Answer

Ans 1) Gini coefficient shows that a country with a perfectly equal distribution of income would have a Gini coefficient of 0.

Ans 2) The correct options are B, C and D.

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