Question

1. WHAT IS THE LORENZ CURVE? IN A COUNTRY WITH A GINI INDEX OF 0 WHAT WOULD THE CURVE LOOK LIKE?

2. DESCRIBE A SOCIAL SAFETY NET FOR THE ELDERLY IN THE UNITED STATES.

3. WHAT ARE THE TWO OBJECTIVES FOR THE ECONOMY?

Answer 1

Lorenz curve

1.The Lorenz curve is a curve or graphical representation developed by Max Lorenz. It shows the inequality in spread of income and wealth. It shows the proportion of income earned by any given percentage of the population.

A Gini coefficient varies from 0 to 1. Zero means there is perfect equality and 1 means there is perfect inequality.

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2.Social safety net for the elderly in the US.

A war was declared in US in the year 1964 and at that time the poverty level was 19%. The social safety net was set up with various welfare programs for the betterment of the Americans. It helped the low income group people to uplift themselves from poverty and hardships. From the name itself we can understand that it acts like a safety net which catches the poor Americans if the fall in their poverty. The target of this program is to bring back the poor Americans to their body safe and sound , to give them a better standard of living, to give them some benefits for free like food, housing, counseling etc.

The two objectives for the US economy are:

1. To reduce extreme poverty
2. To have inclusive economic growth to reduce political turmoil and conflicts between countries.