Exam 28: Income Inequality and Poverty

The phenomenon that describes how transfer programs,which significantly reduce the adversities of poverty,also reduce the opportunity cost of choices that often lead to poverty is known as

Government programs that take money from high-income people and give it to low-income people typically

Income is created when

Imagine two countries,Lebos and Egap,that have identical average annual incomes.In Lebos,the poorest families one year almost always end up as the richest families the next year and become middle-income families the year after that.In Egap,however,the poor remain poor and rich remain rich.Which of the following is true about the two countries?

As the War on Poverty programs were instituted and transfer payments expanded in the last half of the 1960s,what happened to the poverty rate?

When a person who receives welfare benefits earns income,those benefits are reduced as earned income rises.This is referred to as

It would be more reasonable to use annual income data as an index of economic inequality if all of the households

In 2009,the proportion of all poverty-level families headed by a female was

Some people inherit money and wealth that they did nothing to earn.Why don't we tax inheritance at 100 percent?

Since 1970,income inequality in the United States has

Income inequality exists in the United States.Is this necessarily a bad thing? Explain how our assessment of income inequality depends crucially on the source of that inequality.

If a family earned $10,000 and,as a consequence,sustained a reduction of $4,000 in government benefits,the family's implicit marginal tax rate would be

The Samaritan's dilemma describes the problem that exists when transfer programs,designed to help the poor,encourage choices that can promote or perpetuate

Use the following two statements to answer this question. (I)In a market system,resource prices both provide incentives for the efficient allocation of resources and determine income distribution. (II)Income and wealth are neither created nor destroyed,they are just fixed-sized pies to be allocated among individuals.

This year Bill earned $3,000 more than last year.As a result,he received $2,500 less in government transfers.Therefore,Bill's implicit marginal tax rate is about

How do the high implicit marginal tax rates that often occur when transfer payments are inversely linked to earnings affect the incentive of poor people to work and earn?

The idea that transfer benefits to the poor encourage behavior that increases the risk of poverty is known as the

Which of the following is not counted as income when the official poverty rate is calculated?

Assume that Peter is a single parent who is in poverty.He receives food stamps and Medicaid.For every $100 that he earns,Peter loses $35 of his food stamp benefits and $20 in his Medicaid benefits.Also,Peter's income is taxed at a rate of 10 percent.Then,Peter's effective marginal tax rate is

The Earned Income Tax Credit