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A less developed economy has greater income inequality the

     A less developed economy has greater income inequality the

a.less the economy is dependent upon agriculture

b.smaller the middle class

c.more the economy is dependent upon manufacturing

d.less diverse the level of manufacturing activity

e.greater the level of education in the country

23.              Wealth refers to the

a.income earned by an individual

b.value of all assets accumulated by an individual

c.total of all income earned by an individual over an entire lifetime

d.value of all physical assets minus financial assets an individual holds

e.total of all money wealth held by an individual

24.              Life-cycle wealth refers to the

a.income earned by an individual

b.value of stock holdings by an individual

c.monetary assets held by an individual

d.non-money assets held by individuals

e.amount of assets received through inheritance

25.              Which of the following would be included in a person’s life-cycle wealth?

a.savings account

b.refrigerator

c.stock in a corporation

d.government savings bonds

e.income

26.              Which of the following would not be part of a person’s wealth?

a.a $100,000 inheritance

b.$100,000 in a savings account

c.$100,000 of corporate stock

d.a $100,000 mortgage on a home

e.a $10,000 family car

27.              The philosopher John Rawls argued that

a.people would choose income equality if they didn’t know beforehand the “agreed
upon rules” that determine people’s economic position

b.people would choose income inequality to allow the maximum use of their
individual talents

c.it would be impossible to determine beforehand how rich and poor people would
choose between income equality and income inequality

d.people, uninhibited by social convention, would choose income inequality because
they are, by nature, not inclined toward egalitarian values

e.government has a role to ensure income equality to prevent social unrest

28.              To a Marxist, income inequality derives from

a.purely random events

b.incompetent government policy

c.unequal education

d.unequal distribution of property

e.unequal abilities of individuals

29.              According to economist A. P. Lerner, taking income from a wealthy individual and
                            giving it to a poorer individual would

a.decrease the economy’s total utility

b.decrease the economy’s investment rate

c.eventually increase poverty in the economy

d.lessen the incentive to work

e.increase the economy’s total utility

30.              A critical assumption in economist A. P. Lerner’s theory explaining why society’s total
                            utility is maximized with income equality is

a.there is no “level playing field” in people’s choice of employment

b.people have identical utility functions

c.the rich earn their income by exploiting the poor

d.people have equal skills if given equal opportunity

e.the law of diminishing marginal utility does not apply to money

Dec 12 2019 View more View Less

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