Chapter 30: Problem 29

Real median family income in the U.S. has _____. a) grown each year since 2000 b) declined each year since 2000 c) risen by about 20 percent since the late $1960 \mathrm{~s}$ d) become lower today than it was in 1975

Short Answer

Expert verified

Real median family income in the U.S. has shown fluctuations since 2000, with periods of growth and decline. None of the statements are entirely true; however, it is worth noting that real median family income has increased by roughly 38% since the late $1960\mathrm{~s}$, more than the 20% specified in statement c.

Step by step solution

Define the term "real median family income"

Real median family income refers to the middle value of income earned by families when adjusted for inflation. It allows us to track changes in income earned by families over time in real terms, rather than in nominal terms, which do not account for changes in the cost of living.

Analyze Statement a: Growth since 2000

We need to examine whether real median family income has grown each year since 2000. If it did, then the statement would be true. However, by looking at income data over the years, we can find that real median family income has not always grown since 2000. There were periods of decline, particularly during the 2008 recession. Thus, statement a is false.

Analyze Statement b: Decline since 2000

Now, we will check if real median family income has declined each year since 2000. This would mean that there has been a continual decrease in income since 2000. However, this is not true because real median family income has shown both increases and decreases over the years. Therefore, statement b is also false.

Analyze Statement c: 20% increase since the late 1960s

To verify if real median family income has risen by about 20% since the late 1960s, we will need to compare the income values from the 1960s and present day. In the late 1960s, the real median family income was around $45,000 (adjusted for inflation), while in the 2010s, it was closer to $62,000. This shows roughly a 38% increase over time, which is more than the 20% mentioned in the statement. Thus, statement c is false, but only because the percentage increase is more significant than specified.

Analyze Statement d: Lower today than in 1975

Lastly, we need to find out if real median family income is lower today than it was in 1975. Comparing the years, we know that in 1975, the real median family income was approximately $49,000, while present-day figures are higher. Therefore, this statement is false. Based on our analysis, none of the given statements are true. However, it's worth noting that statement c comes closest to being true if we adjust the percentage increase specified.