Which of the Following Explains the Rise in Income Inequality

question 374

Multiple Choice

Which of the following explains the rise in income inequality in the United States from 1970 to 2008?

• 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:

Direct Labour

The labor costs directly attributable to the production of goods or services, typically including wages of workers who are physically involved in creation of the product.

Variable Overhead

Expenses that fluctuate with changes in production volume, such as utilities or materials used in the manufacturing process.

Fixed Overhead

Fixed costs that do not vary with the volume of production, such as rent, salaries, and insurance.

Variable Selling

Costs that vary in direct proportion to the volume of sales, such as commissions or shipping fees.