In a Lorenz curve diagram, the diagonal line represents: MCQ with Answer and Explanation

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In a Lorenz curve diagram, the diagonal line represents:

A. poverty line

B. complete income inequality

C. economic growth

D. perfect equality of income distribution

Answer: Option D

Solution (By JKSSB Mock Tests)

The diagonal line in the Lorenz curve diagram represents perfect income equality.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'UNCTAD' headquarters is in:

A. Paris

B. Geneva

C. New York

D. Vienna

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Correct Answer: Option B

Explanation:
UNCTAD headquarters is in Geneva.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Phillips curve' shows trade-off between:

A. interest rates and inflation

B. unemployment and growth

C. inflation and growth

D. inflation and unemployment

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Correct Answer: Option D

Explanation:
Phillips curve shows inverse relationship between inflation and unemployment.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following best explains the concept of 'Adverse Selection'?

A. Change in behaviour after a contract is signed

B. Situation where one party has more information before entering a contract

C. Equal risk sharing between parties

D. Perfect information leading to efficient outcomes

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Correct Answer: Option B

Explanation:
Adverse selection occurs when asymmetric information exists before a contract is signed, leading to the selection of undesirable parties (e.g., high-risk individuals buying more insurance).

This question belongs to: Economy GK Economy Set 1

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