What does a less steep curve imply about inequality?

What does a less steep curve imply about inequality?

• A. Lower differences between top and bottom incomes
• B. Higher differences between top and bottom incomes
• C. No differences in income
• D. An inverted U trend

Answer: (A)

A less steep curve indicates smaller gaps between the richest and the poorest. In the context of inequality graphs like the Lorenz curve, the curve shows how income is distributed across the population. The diagonal line represents perfect equality. When the curve stays closer to that diagonal, it means the share of income held by different portions of the population is more even, so the difference between top and bottom incomes is reduced. Conversely, a more pronounced bow away from the diagonal signals greater inequality. So a less steep curve points to lower inequality.

A less steep curve indicates smaller gaps between the richest and the poorest. In the context of inequality graphs like the Lorenz curve, the curve shows how income is distributed across the population. The diagonal line represents perfect equality. When the curve stays closer to that diagonal, it means the share of income held by different portions of the population is more even, so the difference between top and bottom incomes is reduced. Conversely, a more pronounced bow away from the diagonal signals greater inequality. So a less steep curve points to lower inequality.