In the United States the degree of individual income mobility ...

[bcretired]

In the United States the degree of individual income mobility (that is, the degree to which people move from higher to lower, or lower to higher, income groupings) is:
 a. rigid in both directions.
 b. flexible in both directions.
 c. flexible upward but rigid downward, since high income perpetuates itself from generation to generation.
 d. flexible downward but rigid upward, since most low-income people never rise significantly above the poverty level.

Question 2

If wage falls below the rate determined by the market equilibrium, in which direction will it move and why?

[sultansheikh]

Answer to Question 1

b

Answer to Question 2

When the wage rate falls below the equilibrium rate, it creates an excess demand for labor which will push the wage back toward the equilibrium.

[bcretired]

Thank you

[sultansheikh]

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