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In an economy with a population of 100, there are 80 farmers and 20 lenders. The...

In an economy with a population of 100, there are 80 farmers and 20 lenders. The farmers use borrowed funds to finance the planting and tending of their crops. The rate of profit for the harvest is 12.5%, while the interest rate charged is 10%. Suppose that only some of the farmers are able to borrow. Ceteris paribus, which of the following changes would increase the Gini coefficient?

A decrease in the fraction of the population who are lenders. (Assume that this increases the fraction of the population who are farmers who can borrow.)

An increase in the profit rate.

A decrease in the interest rate.

An increase in the fraction of the farmers who cannot borrow.
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