If a country's Lorenz curve shifts closer to the line of perfect equality over a decade, it definitively means that the real wages of the lowest-paid workers have increased during that period.
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Interpreting Income Distribution Data
An economist observes that after a period of sustained productivity growth, a country's Lorenz curve has moved significantly closer to the line of perfect equality. The economist wants to determine if the real wages of factory workers have increased. Why is the Lorenz curve, on its own, an insufficient tool for this specific task?
Evaluating Claims about Economic Well-being
If a country's Lorenz curve shifts closer to the line of perfect equality over a decade, it definitively means that the real wages of the lowest-paid workers have increased during that period.