Q. The Gini coefficient is a commonly used measure of the degree of inequality in an income distribution. Which among the following statements will be true for a Gini Coefficient of 1?
Answer:
One family has all the income and everyone else has nothing.
Notes: The Gini coefficient ranges from 0 to 1, where 0 indicates perfect equality (everyone has the same income) and 1 indicates perfect inequality (one individual has all the income). A Gini coefficient of 1 means that one family or individual receives all income, leaving everyone else with nothing. This extreme scenario highlights the stark contrast in wealth distribution. In reality, most countries have Gini coefficients between 0.25 and 0.60, with higher values indicating greater inequality.