If the various elements of innate ability are positively correlated and interact with one another multiplicatively rather than additively to determine earnings,then:

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Quizplus · Accepted Answer

When innate abilities are positively correlated and interact multiplicatively, the distribution of earnings tends to be more skewed to the right, as higher levels of innate abilities will result in much higher earnings. This is because multiplying these abilities will lead to an exponential increase in earnings rather than a linear increase, causing a greater concentration of individuals with higher earnings at the right tail of the earnings distribution.

If the Various Elements of Innate Ability Are Positively Correlated