Over the past several years and until recently, the United States has had lower unemployment rates than most European countries.

Since 1975 the distribution of income has:

A. remained virtually constant from year to year. B. become more equal. C. varied considerably from year to year but in general has been stable. D. become less equal.

Which of the following is true of a change in nonlabor income?

A. There is no income effect because a change in nonlabor income does not change a household's permanent income. B. There is no substitution effect because a change in nonlabor income does not change a household's permanent income. C. There is no income effect because a change in nonlabor income does not change the trade-off between work and leisure. D. There is no substitution effect because a change in nonlabor income does not change the trade-off between work and leisure.