Question 1

Investment in human capital

Accepted Answer

A)  is quite different from and has a much lower return than investment in physical capital. 
B)  is just like investment in physical capital and has a return similar to that earned from other investments. 
C)  is just like investment in physical capital but has a much greater return than do other investments. 
D)  is not comparable to other investments in any way since human capital is embodied in the person. 
A)  is quite different from and has a much lower return than investment in physical capital. 
B)  is just like investment in physical capital and has a return similar to that earned from other investments. 
C)  is just like investment in physical capital but has a much greater return than do other investments. 
D)  is not comparable to other investments in any way since human capital is embodied in the person.

Question 2

All of the following are social insurance programs designed to attack poverty EXCEPT

Accepted Answer

A)  Social Security. 
B)  temporary assistance to needy families. 
C)  food stamps. 
D)  tuition assistance. 
A)  Social Security. 
B)  temporary assistance to needy families. 
C)  food stamps. 
D)  tuition assistance.

Question 3

The most common type of investment in human capital is

Accepted Answer

A)  having more children per family. 
B)  the migration of labor in search of better jobs. 
C)  expanded years of schooling. 
D)  improved health care and maintenance. 
A)  having more children per family. 
B)  the migration of labor in search of better jobs. 
C)  expanded years of schooling. 
D)  improved health care and maintenance.

Question 4

The funds paid to the government today for Social Security taxes are

Accepted Answer

A)  invested to provide for the future benefits of the taxpayers. 
B)  saved to ensure sufficient resources in the future to pay the benefits of workers today when they reach retirement age. 
C)  used by the government to purchase goods and services that will enhance the future productivity of business in the country. 
D)  used to pay the benefits of those who are currently retired. 
A)  invested to provide for the future benefits of the taxpayers. 
B)  saved to ensure sufficient resources in the future to pay the benefits of workers today when they reach retirement age. 
C)  used by the government to purchase goods and services that will enhance the future productivity of business in the country. 
D)  used to pay the benefits of those who are currently retired.

Question 5

In the United States, inheritance accounts for roughly ________ of income inequality.

Accepted Answer

A)  50 percent 
B)  30 percent 
C)  20 percent 
D)  10 percent 
A)  50 percent 
B)  30 percent 
C)  20 percent 
D)  10 percent

Question 6

-In the above figure, the curve that represents the most income inequality is

Accepted Answer

A)  a. 
B)  b. 
C)  c. 
D)  d. 
A)  a. 
B)  b. 
C)  c. 
D)  d.

Question 7

The purpose of the Earned Income Tax Credit Program (EITC) is to

Accepted Answer

A)  provide rebates of Social Security taxes to low-income workers. 
B)  encourage low- and moderate-income workers to take second jobs to increase their income. 
C)  provide in-kind services such as food stamps and public housing to those individuals who have poor credit. 
D)  give tax credits to low-income individuals who do volunteer work in their communities. 
A)  provide rebates of Social Security taxes to low-income workers. 
B)  encourage low- and moderate-income workers to take second jobs to increase their income. 
C)  provide in-kind services such as food stamps and public housing to those individuals who have poor credit. 
D)  give tax credits to low-income individuals who do volunteer work in their communities.

Question 8

-In the above figure, the curve that represents the second most income equality is

Accepted Answer

A)  a. 
B)  b. 
C)  c. 
D)  d. 
A)  a. 
B)  b. 
C)  c. 
D)  d.

Question 9

The government program that provides aid to families in need is

Accepted Answer

A)  TANF. 
B)  Social Security program. 
C)  Supplemental Security Income program. 
D)  Earned Income Tax Credit. 
A)  TANF. 
B)  Social Security program. 
C)  Supplemental Security Income program. 
D)  Earned Income Tax Credit.

Question 10

Suppose there is a high inequality in household income between the highest and the lowest income groups in one country. In response, the government raises the income tax for the highest income group and provides subsidies to the lowest-income group. What would happen to the Lorenz curve as a result of the government programs? Explain.

Accepted Answer

The government tax and subsidy

Question 11

Since the 1930s, out-of-pocket payments for health care have

Accepted Answer

A)  declined from about 50 to 30 percent of total payments. 
B)  declined from about 95 to 20 percent of total payments. 
C)  declined from about 70 to 30 percent of total payments. 
D)  not changed and remain at 70 percent of total payments. 
A)  declined from about 50 to 30 percent of total payments. 
B)  declined from about 95 to 20 percent of total payments. 
C)  declined from about 70 to 30 percent of total payments. 
D)  not changed and remain at 70 percent of total payments.

Question 12

Which of the following is NOT a correct criticism of the Lorenz curve?

Accepted Answer

A)  It does not include payments in kind. 
B)  It does not deal with differences in family size. 
C)  It ignores the impact of age distribution on income distribution. 
D)  It refers to money income after taxes. 
A)  It does not include payments in kind. 
B)  It does not deal with differences in family size. 
C)  It ignores the impact of age distribution on income distribution. 
D)  It refers to money income after taxes.

Question 13

In an attempt to reduce the poverty rate, there has recently been a movement away from income maintenance programs to

Accepted Answer

A)  Supplemental Security Income programs. 
B)  reducing the age a person can retire at. 
C)  encouraging people to get jobs. 
D)  incorporating the Lorenz policy in decisions. 
A)  Supplemental Security Income programs. 
B)  reducing the age a person can retire at. 
C)  encouraging people to get jobs. 
D)  incorporating the Lorenz policy in decisions.

Question 14

The poverty income threshold in the United States was originally calculated by

Accepted Answer

A)  multiplying a nutritionally adequate food plan for emergency use by 4. 
B)  multiplying a nutritionally adequate food plan for emergency use by 2. 
C)  multiplying a nutritionally adequate food plan for emergency use by 3. 
D)  multiplying a nutritionally adequate food plan for emergency use by 5. 
A)  multiplying a nutritionally adequate food plan for emergency use by 4. 
B)  multiplying a nutritionally adequate food plan for emergency use by 2. 
C)  multiplying a nutritionally adequate food plan for emergency use by 3. 
D)  multiplying a nutritionally adequate food plan for emergency use by 5.

Question 15

Inheritance accounts for about

Accepted Answer

A)  5 percent of income inequality. 
B)  10 percent of income inequality. 
C)  15 percent of income inequality. 
D)  30 percent of income inequality. 
A)  5 percent of income inequality. 
B)  10 percent of income inequality. 
C)  15 percent of income inequality. 
D)  30 percent of income inequality.

Question 16

If you believe that all workers should be paid the same, you believe in the

Accepted Answer

A)  egalitarian principle. 
B)  productivity standard. 
C)  benefits standard. 
D)  comparative worth principle. 
A)  egalitarian principle. 
B)  productivity standard. 
C)  benefits standard. 
D)  comparative worth principle.

Question 17

The egalitarian principle of income refers to

Accepted Answer

A)  each person being paid differently. 
B)  each person receiving the same income. 
C)  each person receiving tax breaks. 
D)  each person working the same number of hours. 
A)  each person being paid differently. 
B)  each person receiving the same income. 
C)  each person receiving tax breaks. 
D)  each person working the same number of hours.

Question 18

Official poverty rates in the last 40 years have

Accepted Answer

A)  fallen dramatically. 
B)  risen dramatically. 
C)  stayed roughly the same. 
D)  been eliminated. 
A)  fallen dramatically. 
B)  risen dramatically. 
C)  stayed roughly the same. 
D)  been eliminated.

Question 19

If we include cash benefits and in-kind benefits available to low-income people, the share of the U.S. population in poverty

Accepted Answer

A)  drops dramatically. 
B)  increases somewhat. 
C)  increases dramatically. 
D)  does not change. 
A)  drops dramatically. 
B)  increases somewhat. 
C)  increases dramatically. 
D)  does not change.

Question 20

The income transfers that a person receives from Social Security

Accepted Answer

A)  is not related to the amount that they have contributed. 
B)  is a yearly proportion of the amount contributed. 
C)  is the same for everyone whether they contributed to the system or not. 
D)  depends entirely on the amount received from private pensions. 
A)  is not related to the amount that they have contributed. 
B)  is a yearly proportion of the amount contributed. 
C)  is the same for everyone whether they contributed to the system or not. 
D)  depends entirely on the amount received from private pensions.

Exam 30: Income, Poverty, and Health Care

Investment in human capital

All of the following are social insurance programs designed to attack poverty EXCEPT

The most common type of investment in human capital is

The funds paid to the government today for Social Security taxes are

In the United States, inheritance accounts for roughly ________ of income inequality.

-In the above figure, the curve that represents the most income inequality is

The purpose of the Earned Income Tax Credit Program (EITC) is to

-In the above figure, the curve that represents the second most income equality is

The government program that provides aid to families in need is

Since the 1930s, out-of-pocket payments for health care have

Which of the following is NOT a correct criticism of the Lorenz curve?

In an attempt to reduce the poverty rate, there has recently been a movement away from income maintenance programs to

The poverty income threshold in the United States was originally calculated by

Inheritance accounts for about

If you believe that all workers should be paid the same, you believe in the

The egalitarian principle of income refers to

Official poverty rates in the last 40 years have

If we include cash benefits and in-kind benefits available to low-income people, the share of the U.S. population in poverty

The income transfers that a person receives from Social Security

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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