Chapter20 - Chapter20 TheDistributionofIncome...

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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. ANSWER: d. All of the above are correct. TYPE: M SECTION: 0 DIFFICULTY: 1 2. In the US, labor earnings are what percent of total income? a. 75 percent b. 70 percent c. 65 percent d. 50 percent ANSWER: a. 75 percent TYPE: M SECTION: 0 DIFFICULTY: 1 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. ANSWER: b. the measurements use lifetime incomes rather than annual incomes. TYPE: M SECTION: 1 DIFFICULTY: 1 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. ANSWER: a. efficiently, but does not necessarily ensure that resources are allocated fairly. TYPE: M SECTION: 0 DIFFICULTY: 1 5. The marketplace acts to allocate resources a. fairly. b. to those most desiring them. c. efficiently. d. efficiently and equitably. ANSWER: c. efficiently. TYPE: M SECTION: 0 DIFFICULTY: 1 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. ANSWER: b. distribution of income more fair. TYPE: M SECTION: 0 DIFFICULTY: 1 101
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102   Chapter 20/The Distribution of Income 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. ANSWER: d. the supply and demand for that person’s labor. TYPE: M SECTION: 0 DIFFICULTY: 1 8. Labor earnings make up what part of total income in the U.S. economy? a.
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Chapter20 - Chapter20 TheDistributionofIncome...

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