3 The Gini coefficient Aa Aa Which of the following statemen

3. The Gini coefficient Aa Aa Which of the following statements about the Gini coefficient is true? Check all that apply. The Gini coefficient measures a country\'s economic insecurity. European countries have the lowest values of the Gini coefficient. Latin American and African countries have the highest values of the Gini coefficient. European countries have the highest values of the Gini coefficient. If all a country\'s income went to just one person, the Gini coefficient would be 0 Suppose that Spain has a Gini coefficient of 0.5, France has a Gini coefficient of 0.4, and Germany has a Gini coefficient of 0.3. Based on this information, which of the following statements about income inequality in the three countries are correct? Check all that apply France has a higher degree of income inequality than Germany but lower than Spain The ratio of the total income of the lowest quintile of income distribution to the total income of the highest quintile of income distribution is higher in Spain than in France. The lowest quintile of Spain\'s income distribution is poorer in absolute terms than the lowest quintile of Germany\'s income distribution The ratio of the total income of the lowest quintile of income distribution to the total income of the highest quintile of income distribution is higher in France than in Germany. Germany has a higher degree of income inequality than France or Spain.

Solution

Gini coefficients is a measure of statistical dispersion of income of residents of any country. Its value lie between 0 to 1. If value is 0 it means all residents have same income. If value is 1 it shows highest income inequality that is only one person has nation’s total wealth and others residents have no income.

Latin America and African countries have highest Gini coefficients.

Spain has Gini coefficient 0.5, it means it has 50 % of income inequality. France has 40% and Germany Gini coefficient is 30 %,

so France has higher degree of income inequality than Germany but lower than Spain.