Which of the Following Is Accurate Regarding Income Statistics

question 92

Multiple Choice

Which of the following is accurate regarding income statistics?

• A) Current annual income is also an accurate indicator of relative economic status for the same individual over a longer period such as a decade or lifetime.
• B) When there is substantial income mobility, one's current position in the income distribution will not be a very good indicator as to what one's position will be a few years in the future.
• C) Recent studies indicate that there is a strong positive relationship between the relative income position of a family and the relative income position of their children and grandchildren.
• D) Even though annual income data camouflage the fact, high-income earners generally maintain their status year after year, while those with low current incomes tend to stay poor year after year.

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Definitions:

Liquidity Traps

A situation in which monetary policy becomes ineffective because people hoard cash instead of spending or investing due to expectations of adverse events.

Central Bank

A central bank is the national financial authority responsible for overseeing the monetary system, managing currency supply, and aiming to maintain economic stability.

Lower Bound

A minimum level, often referring to the lowest interest rate that can be effectively implemented by central banks.

Money Supply

The total amount of monetary assets available in an economy at a specific time, which includes cash, coins, and balances held in checking and savings accounts.