Many Argue the Poor Are Getting Poorer, at Least in a Relative

question 88

Multiple Choice

Many argue the poor are getting poorer, at least in a relative sense. Evidence that contradicts this is that

• A) household income of the lowest twenty percent of households relative to the highest twenty percent of households has fallen over the last thirty years.
• B) the official poverty level of income has increased over the years.
• C) household spending of the lowest twenty percent of households relative to the highest twenty percent of households has held constant over the last thirty years.
• D) the pretax distribution of income is more equal than the after-tax distribution of income.

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Definitions:

Short Run

A period in which at least one input is fixed, limiting the capacity for a firm or economy to adjust to changes in demand or supply.

Produce

To create, manufacture, or grow goods and commodities, especially in the context of agriculture and manufacturing.

Variable Costs

Costs that change in proportion to the level of production or business activity.

Fixed Costs

Costs that do not vary with the level of production or output and are incurred even if the business is producing nothing.