Which of the following statements is correct?
A) Approximately 50 percent of our national income is allocated to human capital, while the remaining 50 percent is allocated to physical capital in the form of rents, interest, and corporate profits.
B) As union membership as a share of the U.S. labor force has declined during the last three decades, the share of national income allocated to physical capital has risen.
C) Unions have consistently opposed minimum wage legislation because it tends to cause unemployment.
D) During the past several decades, the share of output going to capital has been virtually constant, even though union membership as a share of the labor force has decreased.

Question

Quizplus · Accepted Answer

The statement that best reflects the relationship between labor unions and the share of national income allocated to physical capital is that during the past several decades, the share of output going to capital has been virtually constant, even though union membership as a share of the labor force has decreased (Option D). This suggests that the decline in union membership has not significantly affected the allocation of income between physical and human capital. Option A incorrectly states that 50 percent of national income is allocated to human capital and the other 50 percent is allocated to physical capital, which is not an accurate representation of the economy. Option B is also incorrect, as it suggests that the share of national income allocated to physical capital has risen due to the decline in union membership, which is not necessarily true. Option C is incorrect because unions typically support minimum wage legislation to improve working conditions and increase wages for their members.

Which of the Following Statements Is Correct