Make a case for income ...

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Make a case for income inequality.

Question 2

If the fraction of U.S. government securities held by foreigners increases, _____.
 a. current consumption by U.S. citizens can decrease
 b. current consumption by U.S. citizens can increase
 c. current interest payments will increase
 d. private investments will increase
 e. the burden of debt on future generations will decrease

[vickybb89]

Answer to Question 1

First, by rewarding people for their productivity by paying them wages equal to their MRPs, people have the incentive to work and improve their skills. Since MRPs vary, people must receive different wage rates, even though this will lead to income inequality. Second, because the rich can afford to save a higher percentage of their income than can the poor, they tend to do the economy's investing, thus generating economic growth that benefits everyone.

Answer to Question 2

b

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Correct answers!

[vickybb89]

Great! Please up vote