Evidence Indicates That Most of the Growth in Earnings Inequality

question 31

Multiple Choice

Evidence indicates that most of the growth in earnings inequality since 1970 is:

• A)within each age group and within each industry
• B)within each age group and between industries
• C)between age groups and within each industry
• D)between age groups and between industries

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Definitions:

Aggregate Expenditure Line

A curve or line that depicts the total spending (consumption, investment, government spending, and net exports) in the economy at different levels of income.

Income Level

An individual's or household's economic status determined by the amount of income generated from wages, investments, and other sources.

Income-Expenditure Model

An economic model that represents the equilibrium level of income or output determined by the intersection of aggregate demand and aggregate supply.

Marginal Propensity

The incremental change in spending (consumption or saving) that occurs with a change in disposable income.