What are the components of national income? What is the relative share going to wages and salaries and to corporate profits?
What will be an ideal response?
National income is divided into compensation of employees (which includes wages and salaries and benefits), rental income, interest income, proprietors’ income (the income of sole proprietorship and partnerships), corporate profits, and taxes on production and imports. Based on 2009 GDP data, by far the largest share of national income goes to compensation of employees (63%). The proprietor’s share (8.5%) is mostly wage compensation too, so when it is added in, about 71.5% of national income goes to the wage compensation categories. About an eighth of national income gets paid out as corporate profits (10.6%).
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Investments in public infrastructure ________
A) are not subject to diminishing returns B) are a misallocation of national savings C) typically decline during periods of rapid economic growth D) may boost productivity and income
In profit centers
a. Managers are difficult to evaluate because there is no simple metric of how well they performed b. Managers typically do not have the information to run their division efficiently c. Managers' decisions can affect other divisions d. Managers typically do not have the incentives to run their division efficiently
The reason U.S. workers were better paid than foreign workers during the 1950s and 1960s is
A. U.S. workers were better trained and educated. B. U.S. workers worked harder. C. we had more capital (plant and equipment) per worker. D. the U.S. dollar was the world's strongest currency.