Question

The United States has a Gini Coefficient of 0.39, while Italy has a Gini Coefficient of 0.33. Which country has greater income inequality and poverty?

A) The United States has higher income inequality, but the poverty rate is unknown.
B) Italy has higher income inequality and more poverty
C) The United States has higher income inequality, while Italy has more poverty
D) Italy has higher income inequality, while the United States has more poverty.

Answer 1

Option (A) is correct.

Step-by-step explanation:

Gini coefficient is one of the statistical measure that is used for estimating or calculating a nation's income inequality, wealth distribution, economic inequality.

Gini coefficient ranges from zero to 1 where 0 means that there is a perfect income equality and 1 means that there is a complete inequality.

The higher value of Gini coefficient indicates greater income inequality in that nation.

In our case,

Gini Coefficient of United states = 0.39

Gini Coefficient of United states = 0.33

Therefore, it can be concluded that United states has greater income inequality because it has the higher value of Gini coefficient and the poverty cannot be determined because of insufficient information.