"If Income Were Redistributed in Favor of the Poor, We

question 30

Multiple Choice

"If income were redistributed in favor of the poor, we would eliminate scarcity." The preceding statement is

• A) essentially correct.
• B) incorrect because scarcity has already been eliminated among the poor in wealthy countries such as the United States.
• C) incorrect; it fails to recognize that poverty will be present as long as resources are scarce.
• D) incorrect; it confuses the elimination of poverty with the elimination of the constraint imposed by scarcity.

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Definitions:

Amortization

The method of systematically amortizing the initial value of a non-physical asset over its estimated useful lifespan.

Pension Expense

The cost recognized by an employer for maintaining a defined benefit retirement plan for its employees.

Service Cost

The portion of the pension expense that is attributed to the current year's service, representing the present value of benefits earned by employees during the year.

Pension Trustee

An individual or organization that holds and manages the assets of a pension fund on behalf of its beneficiaries.