A country’s Gini coefficient for income distribution is currently 0.75 and was 0.15 ten years earlier. Which of the following responses best describes the level and change of the country’s income inequality?

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BlackTom AI · Accepted Answer

The question asks us to describe both the level of income inequality now and how it has changed over the last ten years, given a Gini coefficient of 0.75 today and 0.15 a decade ago.
Option 1: 'Income inequality is relatively high currently and has decreased over the last ten years.' This is inconsistent with the data because the current Gini is 0.75 (high), but it indicates a decrease over time, whereas the change shown is an increase from 0.15 to 0.75, not a decrease.
Option 2: 'Income inequality is relatively low currently and has increased over the last ten years.' The current level would have to be low for this to be true, but a Gini of 0.75 is widely regarded as a high level of inequality. Therefore this option mischaracterizes the present level even though it correctly notes an increase.
Option 3: 'Income inequality is relatively high currently and has increased over the last ten years.' Here, the current Gini of 0.75 indicates high inequality, and the move from 0.15 to 0.75 over ten years reflects a substantial increase. This aligns with both components of the question: a high current level and an upward trend.
In summary, the data show a substantial rise in inequality from a very low level (0.15) to a very high level (0.75) over ten years, so the statement that combines a high current level with an increasing trend is the one that matches the numbers provided.

BU.232.730.81.SU25 Quiz #1

A country’s Gini coefficient for income distribution is currently 0.75 and was 0.15 ten years earlier. Which of the following responses best describes the level and change of the country’s income inequality?

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