A Gini coefficient of one means that ?
Correct answer: D. one family has all the income and every one else has nothing.
- A. all the income is received by the top 20% of the income distribution
- B. income is distributed equally
- C. the income is split equally between the top 20% and the rest of the distribution.
- D. one family has all the income and every one else has nothing.
Explanation
A Gini coefficient of 1 represents complete income inequality, where one household or person receives all income and everyone else receives none. A coefficient of 0 represents perfect equality.
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Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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