Increasing foreign trade has reduced income inequality because the market expans
ID: 1221172 • Letter: I
Question
Increasing foreign trade has reduced income inequality because the market expansion effect increases the work opportunities and wages of low-skilled workers.
a. True
b. False
1 points
QUESTION 2
Government intervention to reduce income inequality might reduce growth rates because of rent-seeking behavior. This means that
a. landlords might raise rental rates on housing in order to pay the higher taxes that go with government wealth redistribution programs.
b. groups who are not among the neediest might put pressure on government officials to obtain transfers of wealth.
c. people who are not home owners, but reside in rental housing, may become unmotivated and work less, reducing payments to landlords and slowing real estate markets.
d. as a larger fraction of the population falls below the poverty line, or near it, they are pushed out of home ownership and into rental housing. This means they cannot build equity, slowing economic growth overall.
1 points
QUESTION 3
Which of the following is NOT a reason for increasing income inequality?
a. A shift to "superstar" markets, in which firms with larger markets seek the very best talent to work for their companies.
b. Rapid technological improvements, which favor educated workers more than lower-skilled workers.
c. Growth of foreign trade, which helps higher-skilled workers whose talents are in higher demand worldwide.
d. A decline in the dollar value of the minimum wage over several decades.
1 points
QUESTION 4
Supporters of supply-side economics would be most likely to argue __________ government intervention to reduce inequality by focusing on its effects on __________.
a. against; economic growth
b. against; fairness
c. in favor of; politics
d. in favor of; economic growth
1 points
QUESTION 5
An income tax is progressive if
a. lower-income households pay a larger share of their income in taxes than higher-income households.
b. most of the tax revenue is used to benefit lower-income households.
c. higher-income households pay a larger share of their income in taxes than lower-income households.
d. most of the tax revenue is used to benefit higher-income households.
1 points
QUESTION 6
The top quintile of income earners would be those whose income is
a. in the highest 5 percent.
b. in the lowest 20 percent.
c. in the highest 20 percent.
d. higher than the lowest 20 percent of households.
a. landlords might raise rental rates on housing in order to pay the higher taxes that go with government wealth redistribution programs.
b. groups who are not among the neediest might put pressure on government officials to obtain transfers of wealth.
c. people who are not home owners, but reside in rental housing, may become unmotivated and work less, reducing payments to landlords and slowing real estate markets.
d. as a larger fraction of the population falls below the poverty line, or near it, they are pushed out of home ownership and into rental housing. This means they cannot build equity, slowing economic growth overall.
Explanation / Answer
Answer 1:
Flase. In US, it has been onserved that wages of low skilled workers have fallen steeply and thus income inequality has risen.
Answer 2:
Option B.
Answer 3:
Option D.
Answer 4:
Option B.
Answer 5:Option C.
Answer 6:Option C