The Argument Against Greater Equality in the Distribution of Income

question 48

Multiple Choice

The argument against greater equality in the distribution of income in the United States hinges predominantly on

• A)Loss of incentives.
• B)Greater productivity.
• C)The loss of horizontal equity.
• D)A higher marginal revenue product.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses and taxes from revenue, indicating its profitability.

Variable Costing

A method of accounting where only variable production expenses, including direct materials, direct labor, and variable manufacturing overhead, are counted towards the cost of products.

Short-Term Pricing

Strategies or tactics a business uses to price goods and services for a relatively short period to meet specific business objectives.

Absorption Costing

A system of accounting that includes every manufacturing expense, from direct materials and labor to variable and fixed overheads, into the calculation of a product’s cost.