Which of the following is represented by 'The Lorenz Curve'?
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Which of the following is represented by 'The Lorenz Curve'?
✓ Correct answer: d) Income Distribution
ExplanationThe Lorenz curve is a graphical tool used to represent the distribution of income or wealth within a population.It was created by Max O. Lorenz in 1905 to show economic inequality.The curve plots the cumulative percentage of total income received against the cumulative percentage of recipients, starting from the poorest to the richest.A perfectly equal income distribution would be represented by a 45-degree line, known as the line of equality.The more the Lorenz curve bows away from the line of equality, the greater the inequality.Hence, the correct answer is "Income Distribution."
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