Question

Country A has a Gini coefficient of .8 (point 8), and country B has a Gini coefficient of .2 (point 2). Which of the following can we conclude?

Country B has more income inequality than country A.

If you add the incomes of the populations of country A and country B, you will end up with a perfectly equal income distribution.

All of the listed answers are correct.

Both countries have relatively equal income distributions.

Both countries have equal income distributions, because their Gini coefficients are less than 1.

None of the listed choices is correct.

Answer 1

Closer the Gini co efficient to zero the more equal the society will be and closer the value of the Gini co efficient to 1 the more totalitarian the economy is .

The answer is "F", none of the listed choices in correct. Country A has more inequal income than country B and they are not equal in income distribution, neither adding up the population will make them equal.