Income & Wealth, Poverty & Inequality

Question 1

What is an Earnings Trap?

Answer 1

Situations where the more an individual earns, the less they are entitled to, making it hard to escape poverty

Question 2

What is the Lorenz Curve?

Answer 2

The Lorenz curve measures the distribution of income & wealth in a country. The line of perfect equality shows the distribution of income when the richest x% of the population owns x% of the cumulative income

Question 3

What is the Gini Coefficient?

Answer 3

Gives a numerical value for inequality and is derived from the Lorenz curve.
Gini=A/A+B
Value of 0 indicates perfect equality
Value of 1 indicates perfect inequality