Economics · Development Economics - Inequality Measures
In the analysis of economic inequality, the Palma Ratio is often used as an indicator in development economics. In this context, it primarily measures which of the following?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The rate at which the general price level of goods and services increases over time.
- 2The disparity in income distribution between the highest-earning and lowest-earning population groups.✓
- 3The magnitude of revenue foregone by governments due to tax exemptions and incentives.
- 4The proportion of the labour force that remains unemployed within an economy.
Correct answer
The disparity in income distribution between the highest-earning and lowest-earning population groups.
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