In 2003, the top 20 percent, or wealthiest fifth, of U.S. households earned _____.
(A) About the same as the bottom four fifths combined.
(B) Less than the bottom four fifths combined.
(C) More than the bottom four fifths combined.
(D) Less than the bottom three fifths combined.
Ans: (A) About the same as the bottom four fifths combined.
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Rent seeking
A) is the act of obtaining special treatment by the government to create economic profit. B) is the attempt to get rent from tardy renters. C) occurs when landlords advertise for apartments and other property for rent. D) is an attempt to sell a property and capture economic profit. E) occurs when a firm charges different prices for different units of its good or service.
Why may equity finance be preferred to debt finance for developing countries?
A) A fall in domestic income automatically reduces the earnings of foreign shareholders without violating any loan agreement. B) There are laws insuring against any default with equity finance. C) The risk is shared between debtor and creditor with debt finance. D) The tax structure leaves equity finance unconstrained. E) Repayments are unaffected by falls in real income.