Which of the Following Explains the Rise in Income Inequality

question 163

Multiple Choice

Which of the following explains the rise in income inequality in the United States from 1970 to 2011?

• A)An increase in minimum wages.
• B)An increase in the demand for skilled labor.
• C)An increase in the demand for unskilled labor.
• D)Reduced international trade with low-wage countries.

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Definitions:

Constant Rate

A consistent, unchanging speed or pace at which something occurs or changes over time.

Diminishing Marginal Returns

The principle that adding an additional factor of production results in a smaller increase in output after a certain point.

Total Product

The total output or production by a firm using a given amount of inputs within a specific period.

Variable Input

A resource or factor of production whose quantity can be changed easily in the short term to adjust production levels.