Explain the relationship between labor earnings and the distribution of income
A person's earnings depend on the supply and demand for that person's labor, which in turn depends on natural ability, human capital, compensating differentials, discrimination, and so on. Because labor earnings make up about three-fourths of the total income in the U.S. economy, the factors that determine wages are also largely responsible for determining how the economy's total income is distributed among the various members of society.
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Which of the following statements about financial markets and securities is TRUE?
A) Many common stocks are traded over-the-counter, although the largest corporations usually have their shares traded at organized stock exchanges such as the New York Stock Exchange. B) As a corporation gets a share of the broker's commission, a corporation acquires new funds whenever its securities are sold. C) Capital market securities are usually more widely traded than shorter-term securities and so tend to be more liquid. D) Prices of capital market securities are usually more stable than prices of money market securities, and so are often used to hold temporary surplus funds of corporations.
Which of the following tax structures creates a disincentive to earn more?
a. Proportional tax structure b. Regressive tax structure c. Digressive tax structure d. Progressive tax structure e. A combination of proportional and regressive tax structure