Exhibit 12-3 Lorenz curve for an economy

If this economy's distribution of income becomes more equal, then the Lorenz curve shown in Exhibit 12-3 will:

Question

Exhibit 12-3 Lorenz curve for an economy

If this economy's distribution of income becomes more equal, then the Lorenz curve shown in Exhibit 12-3 will:

Quizplus · Accepted Answer

When an economy's income becomes more equal, the Lorenz curve will move closer to the 45 ° line, as the distribution of income becomes more equal across the population. This means that the percentage of income held by each percentile of the population becomes more similar, leading to a less bowed-out Lorenz curve.

Exhibit 12-3 Lorenz Curve for an Economy