The Percentage of the Population in the Two Higher Income

question 19

Multiple Choice

The percentage of the population in the two higher income classes (defined by Pew as having more than 200% of median family income) declined from more than 60% in the 1970s to 50% in 2015. Economists that see the decline in the middle class as a cause of declining growth argue

• A)The middle class is responsible for buying a high portion of the goods and services produced.
• B)If the poor can't afford goods, fewer will be produced.
• C)The middle class is responsible for most of the investment dollars available
• D)That middle class are generated by growth and without it, there are fewer such jobs.

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Definitions:

Valuation

The process of determining the present value of an asset or a company, based on its earnings, market position, and future potential.

Private Company

A business owned by private investors, shareholders, or owners, and not publicly traded on stock exchanges. It operates with less regulatory oversight than public companies.

Economic Agreements

Formal arrangements between parties, often nations or businesses, regarding the conduct of economic activity, including trade, investment, and regulation.

Equity

The value of an ownership interest in property, including shareholders' equity in a corporation, representing the residual asset value once liabilities have been subtracted.