Question 1

Which of the following statements applies to the Social Security program?

Accepted Answer

A) Benefits are paid on the basis of need. 
B) It provides cash assistance and services to families with dependent children. 
C) It is financed by payroll taxes on employees and employers. 
D) Benefit levels vary throughout the nation because the system is administered by the individual states. 
A) Benefits are paid on the basis of need. 
B) It provides cash assistance and services to families with dependent children. 
C) It is financed by payroll taxes on employees and employers. 
D) Benefit levels vary throughout the nation because the system is administered by the individual states.

Question 2

Unemployment compensation is financed by taxes levied on employers.

Accepted Answer

A) True 
 B)False

Question 3

The unemployment compensation social insurance program is a

Accepted Answer

A) purely federal government program. 
B) purely state-level government program. 
C) federal-state program. 
D) local government program. 
A) purely federal government program. 
B) purely state-level government program. 
C) federal-state program. 
D) local government program.

Question 4

Which of the following Gini ratios would indicate the least amount of income inequality?

Accepted Answer

A) 0.20 
B) 0.40 
C) 0.60 
D) 0.80 
A) 0.20 
B) 0.40 
C) 0.60 
D) 0.80

Question 5

The earned-income tax credit

Accepted Answer

A) increases the personal income tax liability of low-income working families. 
B) provides a cash payment to low-income working families if their tax credit exceeds their tax liability. 
C) is designed to make labor force employment less attractive. 
D) was eliminated as part of welfare reform in 1996. 
A) increases the personal income tax liability of low-income working families. 
B) provides a cash payment to low-income working families if their tax credit exceeds their tax liability. 
C) is designed to make labor force employment less attractive. 
D) was eliminated as part of welfare reform in 1996.

Question 6

Income

Accepted Answer

A) is a stock concept. 
B) consists of accumulated assets. 
C) is a flow concept. 
D) consists of wages only. 
A) is a stock concept. 
B) consists of accumulated assets. 
C) is a flow concept. 
D) consists of wages only.

Question 7

Which of the following helps explain growing income inequality in the United States in recent years?

Accepted Answer

A) reduced immigration 
B) increased demand for highly skilled workers 
C) the falling labor force participation rate of women 
D) increased power of unions 
A) reduced immigration 
B) increased demand for highly skilled workers 
C) the falling labor force participation rate of women 
D) increased power of unions

Question 8

Wealth

Accepted Answer

A) is a flow concept. 
B) refers to accumulated financial assets only. 
C) refers to accumulated real assets only. 
D) refers to accumulated financial and real assets. 
A) is a flow concept. 
B) refers to accumulated financial assets only. 
C) refers to accumulated real assets only. 
D) refers to accumulated financial and real assets.

Question 9

The TANF program

Accepted Answer

A) is a form of social insurance. 
B) has been found to be unconstitutional by the Supreme Court. 
C) limits total lifetime welfare benefits to 5 years and requires able-bodied adults to work after receiving benefits for 2 years. 
D) perpetuates the so-called culture of poverty. 
A) is a form of social insurance. 
B) has been found to be unconstitutional by the Supreme Court. 
C) limits total lifetime welfare benefits to 5 years and requires able-bodied adults to work after receiving benefits for 2 years. 
D) perpetuates the so-called culture of poverty.

Question 10

If discrimination based on gender and race was eliminated, we would expect the

Accepted Answer

A) personal distribution of income to become less equal. 
B) personal distribution of income to become more equal. 
C) personal distribution of income to be unaffected. 
D) functional distribution of income to change in favor of profits and interest. 
A) personal distribution of income to become less equal. 
B) personal distribution of income to become more equal. 
C) personal distribution of income to be unaffected. 
D) functional distribution of income to change in favor of profits and interest.

Question 11

Which of the following provides public assistance to those who are blind and otherwise disabled?

Accepted Answer

A) Medicare 
B) Supplemental Security Income (SSI) 
C) Medicaid 
D) TANF 
A) Medicare 
B) Supplemental Security Income (SSI) 
C) Medicaid 
D) TANF

Question 12

An employer whose discrimination coefficient is $4 will

Accepted Answer

A) refuse to hire nonpreferred-race workers at any wage rate. 
B) hire only nonpreferred-race workers if the actual nonpreferred-preferred wage differential is $3 an hour. 
C) hire only preferred-race workers if the actual nonpreferred-preferred wage differential is $3 an hour. 
D) hire only preferred-race workers if the nonpreferred-preferred wage differential is $4. 
A) refuse to hire nonpreferred-race workers at any wage rate. 
B) hire only nonpreferred-race workers if the actual nonpreferred-preferred wage differential is $3 an hour. 
C) hire only preferred-race workers if the actual nonpreferred-preferred wage differential is $3 an hour. 
D) hire only preferred-race workers if the nonpreferred-preferred wage differential is $4.

Question 13

Differences in skills or ability are one major reason for income differences in the United States.

Accepted Answer

A) True 
 B)False

Question 14

One main complaint about the official income thresholds used in defining poverty is that they

Accepted Answer

A) fail to account for the effects of the minimum wage. 
B) have remained fixed for over the past two decades. 
C) include noncash benefits such as food stamps and rent subsidies. 
D) are inadequate to meet basic needs in major metropolitan areas. 
A) fail to account for the effects of the minimum wage. 
B) have remained fixed for over the past two decades. 
C) include noncash benefits such as food stamps and rent subsidies. 
D) are inadequate to meet basic needs in major metropolitan areas.

Question 15

In the taste-for-discrimination model,

Accepted Answer

A) discriminatory employers behave as if employing nonpreferred-race workers adds to costs. 
B) individual workers are judged by the characteristics of the groups to which they belong. 
C) prejudiced white employers will never hire African-American workers. 
D) women and minorities are confined to a limited number of occupations. 
A) discriminatory employers behave as if employing nonpreferred-race workers adds to costs. 
B) individual workers are judged by the characteristics of the groups to which they belong. 
C) prejudiced white employers will never hire African-American workers. 
D) women and minorities are confined to a limited number of occupations.

Question 16

African-American worker Jackson earns $30,000 per year; white worker Johnson earns $40,000 per year.On the basis of this information, we can conclude that

Accepted Answer

A) it is not clear whether discrimination is present in this situation. 
B) there are no discriminatory forces at work in the labor market. 
C) Jackson is being discriminated against, but the dollar amount is unclear. 
D) Jackson is being discriminated against in the amount of $10,000 per year. 
A) it is not clear whether discrimination is present in this situation. 
B) there are no discriminatory forces at work in the labor market. 
C) Jackson is being discriminated against, but the dollar amount is unclear. 
D) Jackson is being discriminated against in the amount of $10,000 per year.

Question 17

Which of the following is a public assistance or welfare program as opposed to a social insurance program?

Accepted Answer

A) Supplemental Security Income (SSI) 
B) unemployment compensation 
C) Medicare 
D) Social Security 
A) Supplemental Security Income (SSI) 
B) unemployment compensation 
C) Medicare 
D) Social Security

Question 18

In 2014, about what percentage of U.S.households had annual before-tax incomes of less than $15,000?

Accepted Answer

A) about 6 percent 
B) about 13 percent 
C) about 25 percent 
D) about 33 percent 
A) about 6 percent 
B) about 13 percent 
C) about 25 percent 
D) about 33 percent

Question 19

The U.S.poverty rate was considerably lower in 2014 than in 1960.

Accepted Answer

A) True 
 B)False

Question 20

In 2014, the average income for households in the United States was about

Accepted Answer

A) $68,426. 
B) $42,820. 
C) $56,610. 
D) $69,821. 
A) $68,426. 
B) $42,820. 
C) $56,610. 
D) $69,821.

Exam 23: Income Inequality, Poverty, and Discrimination

Which of the following statements applies to the Social Security program?

Unemployment compensation is financed by taxes levied on employers.

The unemployment compensation social insurance program is a

Which of the following Gini ratios would indicate the least amount of income inequality?

The earned-income tax credit

Income

Which of the following helps explain growing income inequality in the United States in recent years?

Wealth

The TANF program

If discrimination based on gender and race was eliminated, we would expect the

Which of the following provides public assistance to those who are blind and otherwise disabled?

An employer whose discrimination coefficient is $4 will

Differences in skills or ability are one major reason for income differences in the United States.

One main complaint about the official income thresholds used in defining poverty is that they

In the taste-for-discrimination model,

African-American worker Jackson earns $30,000 per year; white worker Johnson earns $40,000 per year.On the basis of this information, we can conclude that

Which of the following is a public assistance or welfare program as opposed to a social insurance program?

In 2014, about what percentage of U.S.households had annual before-tax incomes of less than $15,000?

The U.S.poverty rate was considerably lower in 2014 than in 1960.

In 2014, the average income for households in the United States was about

Limits, Alternatives, and Choices

The Market System and the Circular Flow

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