Chapter 3 Review

Wealth in the United States is distributed more unequally than income
True
The United States has the lowest Gini ratio of any industrialized nation.
False
The United States Congress is an example of a core sphere organization.
True
The Securities and Exchange Commission, which regulates the sale of stocks and bonds, is an example of a business sphere organization.”
False
A tax system that varies the overall percentage tax rate based on a household’s income level is called proportional.
False
Suppose that an individual making $100,000 per year pays $30,000 in total taxes while a person making $30,000 per year pays $5,000 in total taxes. This is an example of a progressive tax system.”
True
Net investment can be positive or negative
True
All production is an example of investment.
False
An example of a stock is the quantity of money you have in your pockets.
True
Fringe benefits, such as employer-paid health care, are considered a type of labor income.”
True
If all income in a country was equally distributed, what would its Gini ratio be?”
The conversion of resources into goods and services is known as
Production
What is the difference between a stock and a flow?
A flow is measured over time while a stock is measured at a point in time.
Which one of the following is an example of human capital?
Your knowledge of economics
Which one of the following is an example of social capital?
The trust you have in other people
Which one of the following is an example of natural capital?
The oil reserves in Alaska
A means-tested program is…
available only to those with limited resources.
Which one of the following activities in least likely to occur in the core sphere?
Manufacturing automobiles
Which one of the following statements is TRUE?
A sustainable socioeconomic system seeks to maintain capital stocks.
Which one of the following would NOT be classified as part of the public purpose sphere?
A farmer cooperative selling milk