Question 1

The income tax structure in the United States is regressive in nature.

Accepted Answer

A) True 
 B)False  False

Question 2

When a low-income individual receives a transfer payment,that individual has less of an incentive to forgo leisure time for work time.

Accepted Answer

A) True 
 B)False  True

Question 3

The table below shows the distribution of income in the U.S.in the year 1978. Table 19.1
 
- Refer to Table 19.1.What percentage of income is received by the bottom 20% of the households?

Accepted Answer

A) 10.3% 
B) 43.9% 
C) 24.7% 
D) 4.3% 
E) 16.9% 
A) 10.3% 
B) 43.9% 
C) 24.7% 
D) 4.3% 
E) 16.9% D

Question 4

Which of the following statements in the context of poverty in the U.S.is true?

Accepted Answer

A) Families headed by males are likely to be poor. 
B) Caucasian Americans carry a much heavier burden of poverty compared to the native Americans. 
C) Education and technical skills do not affect employment in the United States of America. 
D) Females tend to have a greater literacy rate than males in the United States of America. 
E) Minorities,young and disabled have a higher likelihood to fall into poverty 
A) Families headed by males are likely to be poor. 
B) Caucasian Americans carry a much heavier burden of poverty compared to the native Americans. 
C) Education and technical skills do not affect employment in the United States of America. 
D) Females tend to have a greater literacy rate than males in the United States of America. 
E) Minorities,young and disabled have a higher likelihood to fall into poverty

Question 5

The rule which is used to compare economic growth among the nations is:

Accepted Answer

A) the per se rule. 
B) the rule of 72. 
C) the rule of thumb. 
D) the rule of thirds. 
E) the rule of 70. 
A) the per se rule. 
B) the rule of 72. 
C) the rule of thumb. 
D) the rule of thirds. 
E) the rule of 70.

Question 6

The welfare programs undertaken by the U.S.government has been universally successful in reducing poverty and fostering economic growth.

Accepted Answer

A) True 
 B)False

Question 7

If those who are poor at any one time are poor only temporarily,then their plight is only temporary.This statement is based on which of the following assumptions?

Accepted Answer

A) Many spells of poverty are relatively short-lived. 
B) Government spending in the economy is inadequate. 
C) All phases of the business cycle are temporary. 
D) Education infrastructure in the economy is poor. 
E) Once people fall below the poverty line,it is almost impossible for them to rise above it. 
A) Many spells of poverty are relatively short-lived. 
B) Government spending in the economy is inadequate. 
C) All phases of the business cycle are temporary. 
D) Education infrastructure in the economy is poor. 
E) Once people fall below the poverty line,it is almost impossible for them to rise above it.

Question 8

_____ are the primary population group with poverty-level incomes in the USA.

Accepted Answer

A) Single-income households 
B) Households headed by males 
C) College graduates 
D) People who do not have high school education 
E) Retired individuals 
A) Single-income households 
B) Households headed by males 
C) College graduates 
D) People who do not have high school education 
E) Retired individuals

Question 9

For people who are too well off to receive welfare benefits but who would become eligible for negative income tax payments,the negative income tax might create work disincentives.

Accepted Answer

A) True 
 B)False

Question 10

If 50 percent of the population receives 20 percent of the total income it can be represented by:

Accepted Answer

A) a point below the line of equality. 
B) a line below the line of equality. 
C) a point on the line of equality. 
D) a line intersecting the line of equality from below. 
E) a point above the line of equality. 
A) a point below the line of equality. 
B) a line below the line of equality. 
C) a point on the line of equality. 
D) a line intersecting the line of equality from below. 
E) a point above the line of equality.

Question 11

If the negative income tax rate is less than 100 percent,the break-even income level will be lower than the poverty level,and families who are officially considered poor will not receive the benefits.

Accepted Answer

A) True 
 B)False

Question 12

If the guaranteed income floor for a family of four is $14,000 and the tax rate is 50 percent,then the break-even income for this family will be $28,000.

Accepted Answer

A) True 
 B)False

Question 13

Government policies designed to change the distribution of income to one that is more equal involve taking from the rich and giving to the poor.

Accepted Answer

A) True 
 B)False

Question 14

The extent to which people move from one income quintile to another over time is called _____.

Accepted Answer

A) migrancy 
B) moveability 
C) mobility 
D) exchangeability 
E) transferability 
A) migrancy 
B) moveability 
C) mobility 
D) exchangeability 
E) transferability

Question 15

Under the negative income tax program,a family will always receive some amount of transfer from the government,irrespective of its income level.

Accepted Answer

A) True 
 B)False

Question 16

Gini co-efficient is the:

Accepted Answer

A) area between the Lorenz curve and the vertical axis divided by the area under the Lorenz curve. 
B) area between the Lorenz curve and the horizontal axis divided by the area above the Lorenz curve. 
C) area between the Lorenz curve and the line of perfect equality divided by the area under the line of income equality. 
D) area between the Lorenz curve and the line of perfect equality divided by the area above the line of perfect equality. 
E) area between the line of perfect equality and the horizontal axis divided by the area between the Lorenz curve and the horizontal axis. 
A) area between the Lorenz curve and the vertical axis divided by the area under the Lorenz curve. 
B) area between the Lorenz curve and the horizontal axis divided by the area above the Lorenz curve. 
C) area between the Lorenz curve and the line of perfect equality divided by the area under the line of income equality. 
D) area between the Lorenz curve and the line of perfect equality divided by the area above the line of perfect equality. 
E) area between the line of perfect equality and the horizontal axis divided by the area between the Lorenz curve and the horizontal axis.

Question 17

A major problem with household data is that:

Accepted Answer

A) the income of the households vary greatly. 
B) the households usually vary in their consumption patterns. 
C) the households usually comprise of only one individual. 
D) collecting data from the households is highly inconvenient. 
E) the number of persons per household varies greatly. 
A) the income of the households vary greatly. 
B) the households usually vary in their consumption patterns. 
C) the households usually comprise of only one individual. 
D) collecting data from the households is highly inconvenient. 
E) the number of persons per household varies greatly.

Question 18

A Gini of 0 implies:

Accepted Answer

A) every family has equal amount of income. 
B) top 10% of the families appropriate almost 100% of the total income. 
C) bottom 90% of the families have only 10% of the total income. 
D) bottom 20% of the families have 80% of the total income. 
E) only 1 family appropriates the entire national income. 
A) every family has equal amount of income. 
B) top 10% of the families appropriate almost 100% of the total income. 
C) bottom 90% of the families have only 10% of the total income. 
D) bottom 20% of the families have 80% of the total income. 
E) only 1 family appropriates the entire national income.

Question 19

Unemployment insurance provided by the U.S.government is usually funded by:

Accepted Answer

A) the excise duties imposed on the import of foreign goods. 
B) the national tax on payrolls levied on firms. 
C) external borrowing by the U.S.government. 
D) printing new money. 
E) selling off government bonds. 
A) the excise duties imposed on the import of foreign goods. 
B) the national tax on payrolls levied on firms. 
C) external borrowing by the U.S.government. 
D) printing new money. 
E) selling off government bonds.

Question 20

The figure given below shows the Lorenz curves of two countries (Country A and Country B). Figure 19.2
Total income (cumulative percentage)   Total population (cumuative percentage)
-Refer to Figure 19.2.The richest 20 percent of the population in Country A receive:

Accepted Answer

A) 10 percent of the national income. 
B) 20 percent of the national income. 
C) 30 percent of the national income. 
D) 40 percent of the national income. 
E) 50 percent of the national income. 
A) 10 percent of the national income. 
B) 20 percent of the national income. 
C) 30 percent of the national income. 
D) 40 percent of the national income. 
E) 50 percent of the national income.

Exam 19: Income Distribution,Poverty and Government Policy

The income tax structure in the United States is regressive in nature.

When a low-income individual receives a transfer payment,that individual has less of an incentive to forgo leisure time for work time.

The table below shows the distribution of income in the U.S.in the year 1978. Table 19.1 - Refer to Table 19.1.What percentage of income is received by the bottom 20% of the households?

Which of the following statements in the context of poverty in the U.S.is true?

The rule which is used to compare economic growth among the nations is:

The welfare programs undertaken by the U.S.government has been universally successful in reducing poverty and fostering economic growth.

If those who are poor at any one time are poor only temporarily,then their plight is only temporary.This statement is based on which of the following assumptions?

_____ are the primary population group with poverty-level incomes in the USA.

For people who are too well off to receive welfare benefits but who would become eligible for negative income tax payments,the negative income tax might create work disincentives.

If 50 percent of the population receives 20 percent of the total income it can be represented by:

If the negative income tax rate is less than 100 percent,the break-even income level will be lower than the poverty level,and families who are officially considered poor will not receive the benefits.

If the guaranteed income floor for a family of four is $14,000 and the tax rate is 50 percent,then the break-even income for this family will be $28,000.

Government policies designed to change the distribution of income to one that is more equal involve taking from the rich and giving to the poor.

The extent to which people move from one income quintile to another over time is called _____.

Under the negative income tax program,a family will always receive some amount of transfer from the government,irrespective of its income level.

Gini co-efficient is the:

A major problem with household data is that:

A Gini of 0 implies:

Unemployment insurance provided by the U.S.government is usually funded by:

The figure given below shows the Lorenz curves of two countries (Country A and Country B). Figure 19.2 Total income (cumulative percentage) Total population (cumuative percentage) -Refer to Figure 19.2.The richest 20 percent of the population in Country A receive:

Economics: The World Around You

Choice, opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

Consumer Choice

Supply: The Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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