In a "superstar economy," companies try to find only the very best talent. What effect has this had on labor markets?
A. There is a widening gap in income between people who are competent and people who are the very best.
B. Per capita income has dropped because the "superstars" tend to save, rather than spend, their large salaries.
C. The income gap has narrowed as the "superstars" come up with ideas to produce in ways that boost the pay of lower-income workers.
D. Unemployment tends to increase because one top employee may replace two or three less competent employees.
Answer: A
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If the expected inflation rate was 2.5%, the expected real interest rate was 4.0%, and the real interest rate turned out to be 5.1%, then the nominal interest rate equals
A) 1.4%. B) 1.5%. C) 2.6%. D) 6.5%.
Horizontal equity is the concept that
a. equally situated individuals should be taxed equally. b. persons with the same income should be taxed equally. c. equal property value should be taxed equally. d. persons living in the same neighborhood should be taxed equally.
Which of the following was NOT true when Katharine McCormick was born in 1875?
A. Very few women went to college B. Birth control was illegal C. Women couldn't vote D. Women were not allowed to own property
Suppose households unexpectedly decrease consumption. Which of the following will occur as a result of this unexpected reduction in consumption?
A) an increase in stock prices B) a reduction in stock prices C) no change in stock prices D) an ambiguous effect on stock prices