Which statement best describes the Gini coefficient?

Which statement best describes the Gini coefficient?

• A. Measures inflation
• B. Measures inequality; 0 = perfect equality, 1 = max inequality.
• C. Measures unemployment
• D. Measures government debt

Answer: (B)

The Gini coefficient is a single-number measure of how evenly income or wealth is distributed in a population. A value of zero means everyone has the same income (perfect equality), while a value of one indicates extreme concentration of income (max inequality). It comes from the Lorenz curve, representing the cumulative share of income against the cumulative population, and the Gini is effectively the area between that curve and the line of perfect equality. Because of this, it directly captures inequality rather than prices, unemployment, or debt levels. So it’s the best description among the options for what the Gini coefficient quantifies.

The Gini coefficient is a single-number measure of how evenly income or wealth is distributed in a population. A value of zero means everyone has the same income (perfect equality), while a value of one indicates extreme concentration of income (max inequality). It comes from the Lorenz curve, representing the cumulative share of income against the cumulative population, and the Gini is effectively the area between that curve and the line of perfect equality. Because of this, it directly captures inequality rather than prices, unemployment, or debt levels. So it’s the best description among the options for what the Gini coefficient quantifies.