Question 1

Of the following groups, which had the highest incidence of poverty in 2014?

Accepted Answer

A) African Americans 
B) Hispanics 
C) female householders 
D) persons 65 or older 
A) African Americans 
B) Hispanics 
C) female householders 
D) persons 65 or older

Question 2

Suppose Rita obtains 10 units of utility from the last dollar of income received by her, and Joseph obtains 6 units of utility from the last dollar of his income.Assume both Joseph and Rita have the same capacity to derive utility from income.Those who favor an equal distribution of income would

Accepted Answer

A) advocate redistributing income from Joseph to Rita. 
B) advocate redistributing income from Rita to Joseph. 
C) be content with this distribution of income between Rita and Joseph. 
D) argue that any redistribution of income between them would increase total utility. 
A) advocate redistributing income from Joseph to Rita. 
B) advocate redistributing income from Rita to Joseph. 
C) be content with this distribution of income between Rita and Joseph. 
D) argue that any redistribution of income between them would increase total utility.

Question 3

In 2014, the official poverty line for a household of four in the United States was

Accepted Answer

A) $24,230. 
B) $32,473. 
C) $12,071. 
D) $26,803. 
A) $24,230. 
B) $32,473. 
C) $12,071. 
D) $26,803.

Question 4

Another term often used to refer to family wealth is

Accepted Answer

A) income. 
B) net worth. 
C) salary and wages. 
D) spending. 
A) income. 
B) net worth. 
C) salary and wages. 
D) spending.

Question 5

The degree of inequality in income distribution based on single-year data is

Accepted Answer

A) understated even though it takes into account income mobility. 
B) overstated because it does not take into account income mobility. 
C) understated because it does not take into account income mobility. 
D) overstated even though it takes into account income mobility. 
A) understated even though it takes into account income mobility. 
B) overstated because it does not take into account income mobility. 
C) understated because it does not take into account income mobility. 
D) overstated even though it takes into account income mobility.

Question 6

The basic economic argument for greater income equality is that

Accepted Answer

A) an equal distribution of income is the logical outcome of any tax-transfer program. 
B) because citizens enjoy political equality, they are also entitled to economic equality. 
C) a more equal distribution of income will tend to maximize incentives to work, invest, and assume risk. 
D) a more equal distribution of a given amount of income will increase the total utility of consumers. 
A) an equal distribution of income is the logical outcome of any tax-transfer program. 
B) because citizens enjoy political equality, they are also entitled to economic equality. 
C) a more equal distribution of income will tend to maximize incentives to work, invest, and assume risk. 
D) a more equal distribution of a given amount of income will increase the total utility of consumers.

Question 7

The crowding of women, African Americans, and certain ethnic groups into less-desirable, lower-paying occupations is

Accepted Answer

A) employment discrimination. 
B) human capital discrimination. 
C) statistical discrimination. 
D) occupational segregation. 
A) employment discrimination. 
B) human capital discrimination. 
C) statistical discrimination. 
D) occupational segregation.

Question 8

The TANF program is designed to

Accepted Answer

A) increase the minimum wage. 
B) shift people from welfare to employment. 
C) provide medical insurance to poverty-level workers. 
D) provide income to the blind and disabled. 
A) increase the minimum wage. 
B) shift people from welfare to employment. 
C) provide medical insurance to poverty-level workers. 
D) provide income to the blind and disabled.

Question 9

The earned-income tax credit (EITC) is, in essence,

Accepted Answer

A) a tax credit for corporate contributions to charity. 
B) a tax break for businesses that invest in community programs. 
C) an income payment to those individuals who are not able to work. 
D) a wage subsidy for low-income workers to offset Social Security taxes. 
A) a tax credit for corporate contributions to charity. 
B) a tax break for businesses that invest in community programs. 
C) an income payment to those individuals who are not able to work. 
D) a wage subsidy for low-income workers to offset Social Security taxes.

Question 10

The Temporary Assistance for Needy Families (TANF) program expanded welfare benefits and has no limit on the number of years for receiving welfare benefits.

Accepted Answer

A) True 
 B)False

Question 11

Social insurance programs partially replace income that has been lost due to the following, except

Accepted Answer

A) retirement. 
B) disabilities. 
C) temporary unemployment. 
D) resignation from a job. 
A) retirement. 
B) disabilities. 
C) temporary unemployment. 
D) resignation from a job.

Question 12

The Lorenz curve

Accepted Answer

A) plots graphically the poverty rate over time. 
B) is located closer to the diagonal today than it was in 1975. 
C) plots graphically the distribution of income. 
D) is located farther from the diagonal when income is defined to include the value of noncash transfers. 
A) plots graphically the poverty rate over time. 
B) is located closer to the diagonal today than it was in 1975. 
C) plots graphically the distribution of income. 
D) is located farther from the diagonal when income is defined to include the value of noncash transfers.

Question 13

The U.S.poverty rate for the elderly (65 and over) is higher than for the general population.

Accepted Answer

A) True 
 B)False

Question 14

The empirical data indicate that the tax system and the transfer programs of the government

Accepted Answer

A) increase the degree of inequality in the distribution of income. 
B) make no change in the degree of inequality in the distribution of income. 
C) reduce the degree of inequality in the distribution of income. 
D) affect the distribution of wealth, not income. 
A) increase the degree of inequality in the distribution of income. 
B) make no change in the degree of inequality in the distribution of income. 
C) reduce the degree of inequality in the distribution of income. 
D) affect the distribution of wealth, not income.

Question 15

Which is a payment or wage subsidy made by the Federal government to offset Social Security taxes for low-income workers?

Accepted Answer

A) the food-stamp program 
B) Supplement Security Income 
C) the earned-income tax credit 
D) Temporary Assistance to Needy Families 
A) the food-stamp program 
B) Supplement Security Income 
C) the earned-income tax credit 
D) Temporary Assistance to Needy Families

Question 16

The eligibility basis for the Supplemental Nutrition Assistance Program (or SNAP, formerly called the food-stamp program) is

Accepted Answer

A) age. 
B) illness. 
C) income. 
D) disability. 
A) age. 
B) illness. 
C) income. 
D) disability.

Question 17

In the quintile distribution of income, the term "quintile" represents

Accepted Answer

A) 5 percent of the income receivers. 
B) 10 percent of the income receivers. 
C) 20 percent of the income receivers. 
D) 25 percent of the income receivers. 
A) 5 percent of the income receivers. 
B) 10 percent of the income receivers. 
C) 20 percent of the income receivers. 
D) 25 percent of the income receivers.

Question 18

Which of the following would be considered part of wealth?

Accepted Answer

A) wages and salaries 
B) rental payments 
C) profits from a corporation 
D) corporate stock holdings 
A) wages and salaries 
B) rental payments 
C) profits from a corporation 
D) corporate stock holdings

Question 19

One of the provisions of the Temporary Assistance for Needy Families (TANF) program was to

Accepted Answer

A) guarantee cash assistance for poor families. 
B) set a 5-year lifelong limit on welfare benefits. 
C) get the federal government to pay more of the cost of welfare. 
D) make welfare benefits more equitable among those receiving them. 
A) guarantee cash assistance for poor families. 
B) set a 5-year lifelong limit on welfare benefits. 
C) get the federal government to pay more of the cost of welfare. 
D) make welfare benefits more equitable among those receiving them.

Question 20

In 2014, the highest quintile of households in the U.S.income distribution received about

Accepted Answer

A) 43 percent of total income. 
B) 55 percent of total income. 
C) 62 percent of total income. 
D) 51 percent of total income. 
A) 43 percent of total income. 
B) 55 percent of total income. 
C) 62 percent of total income. 
D) 51 percent of total income.

Exam 23: Income Inequality, Poverty, and Discrimination

Of the following groups, which had the highest incidence of poverty in 2014?

Suppose Rita obtains 10 units of utility from the last dollar of income received by her, and Joseph obtains 6 units of utility from the last dollar of his income.Assume both Joseph and Rita have the same capacity to derive utility from income.Those who favor an equal distribution of income would

In 2014, the official poverty line for a household of four in the United States was

Another term often used to refer to family wealth is

The degree of inequality in income distribution based on single-year data is

The basic economic argument for greater income equality is that

The crowding of women, African Americans, and certain ethnic groups into less-desirable, lower-paying occupations is

The TANF program is designed to

The earned-income tax credit (EITC) is, in essence,

The Temporary Assistance for Needy Families (TANF) program expanded welfare benefits and has no limit on the number of years for receiving welfare benefits.

Social insurance programs partially replace income that has been lost due to the following, except

The Lorenz curve

The U.S.poverty rate for the elderly (65 and over) is higher than for the general population.

The empirical data indicate that the tax system and the transfer programs of the government

Which is a payment or wage subsidy made by the Federal government to offset Social Security taxes for low-income workers?

The eligibility basis for the Supplemental Nutrition Assistance Program (or SNAP, formerly called the food-stamp program) is

In the quintile distribution of income, the term "quintile" represents

Which of the following would be considered part of wealth?

One of the provisions of the Temporary Assistance for Needy Families (TANF) program was to

In 2014, the highest quintile of households in the U.S.income distribution received about

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The Market System and the Circular Flow

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