When we compare shares of income earned by U.S. households over the past 40 years, which of the following statements about the distribution of income is true?
A) The percentage of total income represented by each quintile has increased.
B) The percentage of total income represented by each quintile has decreased.
C) The largest gain in income percentage is in the top 5% of households.
D) Lower-income households gained at the expense of higher-income households.
C
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An increase in the marginal propensity to import will cause
A) the multiplier to increase and a given change in government spending (G) to have a larger effect on domestic output. B) the multiplier to increase and a given change in government spending (G) to have a smaller effect on domestic output. C) the multiplier to decrease and a given change in government spending (G) to have a larger effect on domestic output. D) the multiplier to decrease and a given change in government spending (G) to have a smaller effect on domestic output.
Suppose that the equilibrium price of pickles falls while the equilibrium quantity rises. The most likely explanation for these changes is:
A. an increase in the supply of pickles. B. an increase in demand for pickles. C. a decrease in demand for pickles. D. a decrease in the supply of pickles.