An Increase in Inequality Will Always Be Accompanied by

question 26

Multiple Choice

An increase in inequality will always be accompanied by

• A) a reduction of earnings of those in the lowest percentiles.
• B) an increase of earnings of those in the highest percentiles.
• C) an increase in the dispersion of incomes.
• D) all of the above.

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Definitions:

Perpetuity

A financial instrument or investment that pays a fixed amount of money indefinitely without a maturity date.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually with fixed dividends.

Annual Dividend

The total dividend payment a company makes to its shareholders in a year.

Compounded Monthly

A method of calculating interest in which the interest accrued in each month adds to the principal for the calculation of subsequent interest.