Which of the following does not explain the rise in income inequality in the United States from 1970 to 2011?
a. Changes in technology.
b. An increase in minimum wages.
c. A reduction in the demand for unskilled labor.
d. Increased international trade with low-wage countries.
b
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When shopping the consumer is interested in absolute prices
Indicate whether the statement is true or false
As used in this text, "autonomous" variables are
A) spontaneous variables that are completely unpredictable. B) completely independent of income, although they can be explained by movements in other variables. C) determined only by income levels. D) the same as endogenous variables.
The abnormal net income model defines the market value of a firm
A) is its book value minus the present value of expected economic profits. B) is its book value plus the present value of expected economic profits. C) is its book value divided by the present value of expected economic profits. D) is its book value multiplied by the present value of expected economic profits.
Suppose stock prices rise. To offset the resulting change in output the Federal Reserve could
a. increase the money supply. This increase would also move the price level closer to its value before the rise in stock prices. b. increase the money supply. However, this increase would move the price level farther from its value before the rise in stock prices. c. decrease the money supply. This decrease would also move the price level closer to its value before the rise in stock prices. d. decrease the money supply. However, this decrease would move the price level farther from its value before the rise in stock prices.