Which economic concept is used to measure income inequality?

• A. Event probability
• B. Inflation
• C. Interest rates
• D. Income inequality

Answer: (D)

The main concept being tested is recognizing the term that describes how income is distributed across a population. Measuring income inequality refers to the extent of unevenness in income distribution, so the best answer is the term that names that phenomenon itself. In practice, economists quantify this inequality using specific metrics like the Gini coefficient or the Lorenz curve, but the broad idea remains income inequality. The other options describe different ideas: event probability is about how likely something is to occur, inflation tracks changes in the overall price level, and interest rates relate to the cost of borrowing or the return on savings, none of which measure how unequal incomes are distributed.