In 1972, a Very Controversial Study Asserted That Income Differences

question 36

Multiple Choice

In 1972, a very controversial study asserted that income differences among individuals did not depend on genetic differences in reasoning ability, or differences between schools, or family background.Moreover, the effects of level of schooling are much less than previously understood.After controlling for all of these background variables, much of the variation in earnings appeared to be random.From this analysis, one might reach the very controversial conclusion that earnings depended to a very great extent on

• A)human capital.
• B)ability.
• C)schooling.
• D)luck.

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Definitions:

Cash Purchase Discount

A reduction in the amount paid for goods or services in exchange for paying in cash rather than credit.

Interest Expense

The cost incurred by an entity for borrowed funds, often a significant component of financial expense in the income statement.

Late Payment

A situation where a borrower has failed to make loan or debt repayments by the due date, often resulting in penalties.

Absorption Costing

An accounting method that includes all direct and indirect manufacturing costs in the cost of a product.