Differences in Wages Between Highly Educated Workers and Less Educated

question 12

Multiple Choice

Differences in wages between highly educated workers and less educated workers are most likely to be considered:

• A)unfair by all economists
• B)completely fair by everyone
• C)a compensating differential for the cost of becoming educated
• D)a signal that the market is indifferent to a worker's level of human capital

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Definitions:

Valuation Allowance

An accounting provision made to offset a portion of the deferred tax assets if it's more likely than not that some portion or all of the asset may not be realized.

Deferred Tax Asset

An accounting item that refers to a situation where a business has paid more taxes in advance than its current tax liability, or has carryover of losses that can be used to lower future tax payments.

Year-end Deferred Income Taxes

Taxes on income that is earned in one accounting period but not paid until another, resulting from timing differences between accounting recognition and the tax laws.

Net Operating Loss

A period when a company's allowable tax deductions exceed its taxable income, potentially reducing future taxable income.