What does the lorenz curve illustrate about the economy?

Lorenz curve can be understood as a graphical representation of distribution of wealth or income among the population in a given economy.

Explanation:

Lorenz Curve was proposed by Max O. Lorenz in the year 1905 to represent inequality in the distribution of income among the given population. This curve illustrates that the distribution of wealth is not equal, where one section of the population has all the wealth or income of the economy and the other section of the population is left with none. Whereas in the case of perfect equality, each section of the population should receive an equal amount of wealth of the economy. This means that N% of the society should always have N% of income and not more and not less than that. Thus, this situation is hypothetical and thus, the idea of the Lorenz Curve comes into consideration.

D

Explanation:

Preparing an unadjusted trial balance is the fourth step in the accounting cycle (might as well prepare a worksheet to work on the next step)

Next step will be determining transactions needed to be adjusted and recording it in the general journal as adjusting entries to prepare the adjusted trial balance .

And then prepare the financial statements.