The Study by Economists Cox and Alm Found That the 2006

question 441

Multiple Choice

The study by economists Cox and Alm found that the 2006 after-tax income of the richest fifth of U.S. households is

• A)equal to the after-tax income of the poorest fifth.
• B)7 times the after-tax income of the poorest fifth.
• C)14 times the after-tax income of the poorest fifth.
• D)21 times the after-tax income of the poorest fifth.

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Definitions:

Labor Income

Earnings derived from employment, including wages, salaries, bonuses, and other compensation for work performed.

Lump Sum Payment

A single payment made at a particular time, as opposed to a series of payments made over time.

Leisure

Free time available to an individual excluding time spent on work, essential activities, or commitments.

Bushel

A volume measure used in agriculture, particularly in the United States, equivalent to 8 dry gallons or about 35.24 liters.