The Degree of Inequality in the Distribution of Annual Income

question 132

Multiple Choice

The degree of inequality in the distribution of annual income is:

• A) understated because it does not take into account wages and salaries.
• B) overstated because it does not take into account how income changes over time.
• C) understated because it does not take into account how income changes over time.
• D) overstated because it does not take into account wages and salaries.

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Definitions:

Produced

The act of creating, manufacturing, or bringing into existence goods and services.

Consumer Surplus

The disparity between what consumers are prepared and can afford to spend on a product or service compared to the actual amount they end up paying.

Tariff

A tax imposed on imported goods to protect domestic industries or to generate revenue.

Tariff Revenue

Income that governments earn from imposing taxes on imported goods to protect domestic industries or generate income.