Reference: 1918 $\quad$ $\quad$ $\quad$ $\quad$ $\quad$

question 66

Multiple Choice

Reference: 1918 $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Income Distribution in the United States }$$$\begin{array} { | l | c | c | } \hline \text { Quintile } & \begin{array} { c } \text { 1968 Income } \\\text { Share }\end{array} & \text { 1997 Income Share } \\\hline \text { Lowest 20\% } & 4.20 \% & 3.60 \% \\\hline \text { Second 20\% } & 11.1 & 8.9 \\\hline \text { Third 20\% } & 17.5 & 15 \\\hline \text { Fourth 20\% } & 24.5 & 23.2 \\\hline \text { Highest 20\% } & 42.8 & 49.4 \\\hline \text { Top 5\% } & 16.6 & 21.7\\\hline\end{array}$$
-(Exhibit: Income Distribution in the United States) In 1968 and 1997, the lowest 40 percent of the families received _______ and _______ percent of the income, respectively.

• A)4.2; 3.6
• B)11.1; 8.9
• C)15.3; 12.5
• D)None of the above are true.

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Definitions:

Macroeconomic Theories

Encompass the broad concepts and frameworks used to understand, analyze, and assess the overall behavior of a nation's economy, including factors like inflation, unemployment, and economic growth.

Laffer Curve

A theoretical representation of the relationship between tax rates and tax revenue, suggesting an optimal tax rate for maximizing revenue.

Supply-Side Economics

Main tenets: economic role of federal government is too large; high tax rates and government regulations hurt the incentives of individuals and business firms to produce goods and services.

Systematic Error

refers to a consistent, predictable error present in the results of measurements or experiments due to flaw in the measurement system.