Kuznets's investigations of development suggested that income
a. generally becomes more unequal as development progresses
b. generally becomes more unequal up to a point, then becomes more equal
c. generally becomes more equal as development progresses
d. generally become more equal up to a point, then become more unequal
e. none of the above
B
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Crowding out is a reduction in private investment caused by government budget deficits, and may partially offset the expansionary effects of fiscal policy. The exact degree of crowding out depends on all of the following except
A) how much of the deficit is financed by households, firms, and governments outside of the United States. B) how much real interest rates increase. C) the level of the marginal corporate income tax rate. D) the sensitivity of investment to the real interest rate.
If the real wage needs to decrease to restore equilibrium in a labor market, this can happen by
A) keeping the nominal wage constant and allowing deflation to allow the real wage to decline. B) keeping the nominal wage constant and allowing inflation to allow the real wage to decline. C) raising the nominal wage and allowing deflation to allow the real wage to decline. D) raising the nominal wage so long as there is no inflation occurring in the economy.