20 - Chapter 20 The Distribution of Income MULTIPLE CHOICE...

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Chapter 20 The Distribution of Income MULTIPLE CHOICE 1 . The government’s policies enacted to make the distribution of income more equitable causes all of the following EXCEPT, a. a less efficient allocation of resources. b. a distortion of incentives. c. altered behavior. d. All of the above are correct. 2 . In the US, labor earnings are what percent of total income? a. 75 percent b. 70 percent c. 65 percent d. 50 percent 3 . All of the following are problems with measuring inequality, EXCEPT   that a. the measurements usually do not include in-kind transfers. b. the measurements use lifetime incomes rather than annual incomes. c. the measurements should use permanent income, not including transitory changes. d. poverty is long term for relatively few families. 4 . The invisible hand of the marketplace acts to allocate resources a. efficiently, but does not necessarily ensure that resources are allocated fairly. b. fairly, and ensures that resources are allocated efficiently. c. fairly, but does not necessarily ensure that resources are allocated efficiently. d. efficiently, and ensures that resources are allocated equitably. 5 . The marketplace acts to allocate resources a. fairly. b. to those most desiring them. c. efficiently. d. efficiently and equitably. 6 . The government enacts policies to make the a. distribution of income more efficient. b. distribution of income more fair. c. redistribution of income more efficient. d. redistribution of income more efficient and fair. 7 . A person’s earnings depend on a. whether or not the economy is experiencing inflation. b. how well the economy is doing. c. how much profit her employer is able to make. d. the supply and demand for that person’s labor. 8 . Labor earnings make up what part of total income in the U.S. economy? a. all of it b. three-fourths c. one-half d. one-fourth
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9 . The income distribution in a society is largely a. determined by the government’s policies. b. determined by business decisions. c. determined by factors that determine wages. d. independent of market allocations of resources. 10 . In general, the invisible hand of the marketplace acts to allocate resources a. neither efficiently nor fairly. b. fairly, but not necessarily efficiently. c. efficiently and fairly. d. efficiently, but not necessarily fairly. 11 . When a government enacts policies that redistribute income, all of the following will occur EXCEPT : a. the government will distort incentives. b.
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20 - Chapter 20 The Distribution of Income MULTIPLE CHOICE...

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