Final answer:
The World Bank utilizes the Gini Coefficient to measure income inequality, which ranges from 0 (perfect equality) to 1 (perfect inequality).
Step-by-step explanation:
The World Bank uses the term Gini Coefficient as its measure of income inequality. This statistical measure represents the income distribution within a nation, with values ranging from 0 to 1, where 0 signifies perfect equality and 1 indicates perfect inequality. By comparing the cumulative shares of income across different segments of the population, typically divided into quintiles, we can analyze the extent of inequality present.
For instance, a higher Gini Coefficient suggests that a larger share of the nation's income is concentrated in the hands of fewer individuals. In addition to Lorenz curves, which graph the percentage of total income of the population that is cumulatively earned by the bottom x% of the population, the Gini Coefficient is an essential tool for visualizing and measuring economic inequality.