Suppose the Data Show That Each Year Between 1962 and 2012,10

question 90

Multiple Choice

Suppose the data show that each year between 1962 and 2012,10 percent of all income earners (in the United States) earned little enough to be considered poor.It follows that

• A) the person who was part of the 10 percent poor in 1962 was also part of the 10 percent poor in 2012.
• B) the person who was part of the 10 percent poor in 1962 may not be part of the 10 percent poor in 2012.
• C) there is no upward income mobility in the United States.
• D) the income distribution in the United States (during this period of time) was unequal.
• E) b and d

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Definitions:

Capital Stock

Total assets held by a firm, including buildings, machinery, equipment, and patents, used to produce goods and services.

Depreciation

The process through which the value of an asset decreases over time, often used to spread the cost of a tangible asset over its useful life.

Gross Investment

The total amount invested in the creation of new capital assets like buildings and machinery before accounting for depreciation.

Disposable Income

is the amount of money that households have available for spending and saving after income taxes have been accounted for.