Chapter 78, Problem 5MCQ

To determine

To which point Gini coefficient would equal when a country has a perfectly equal distribution of income.

Answer to Problem 5MCQ

From the available options, the correct option is 0.

Explanation of Solution

Because all values of the frequency of distribution are equal, the Gini coefficient is equal to zero when a nation has an entirely equal distribution of income. As a result, choices 1, 10, 50, and 100 are erroneous since they represent the distribution's highest level of inequality.

In simple words, if the Gini coefficient is 0 then it represents perfect equality and if it is at its maximum of 100, there is perfect inequality.

Therefore, it is clear that a country will have a perfectly equal distribution of income when Gini Coefficient is zero.

Then, the correct option is a (0).

Economics Concept Introduction

Introduction: The Gini coefficient refers to the measurement of the inequality among values of a frequency distribution which is developed by Corrado Gini and it covers the distribution of income and distribution of wealth such as the levels of income.