Question 1

The top 1 percent share of income in the United States was only _____ percent in 1978 as compared to _____ in 2007.

Accepted Answer

A) 7.55; 22.49 
B) 5.2; 36 
C) 3.45; 10.76 
D) 1.09; 13.44 
A) 7.55; 22.49 
B) 5.2; 36 
C) 3.45; 10.76 
D) 1.09; 13.44

Question 2

Which of the following is true of the increase in the wealth of households during 2001 to 2007?

Accepted Answer

A) The average household benefitted more from these gains than the rich. 
B) The increase in median wealth was much greater than the increase in mean wealth. 
C) The gains were a result of the housing bubble. 
D) The gains were the result of increases in stock prices. 
A) The average household benefitted more from these gains than the rich. 
B) The increase in median wealth was much greater than the increase in mean wealth. 
C) The gains were a result of the housing bubble. 
D) The gains were the result of increases in stock prices.

Question 3

As a result of public policy changes in the U.S. since the 1980s, _____.

Accepted Answer

A) more people are becoming rich due to inherited wealth 
B) more people are becoming rich due to earned wealth 
C) the wealth of those at the lower end of the income distribution has increased 
D) the savings rate for people at the lower end of the income distribution has increased 
A) more people are becoming rich due to inherited wealth 
B) more people are becoming rich due to earned wealth 
C) the wealth of those at the lower end of the income distribution has increased 
D) the savings rate for people at the lower end of the income distribution has increased

Question 4

According to the Pew Charitable Trust methodology for identifying the middle class, if people near the boundary between the lowest and the lower middle income class gain more income, the middle class will ___

Accepted Answer

A) shrink, but that is unambiguously a good thing. 
B) shrink, and that is unambiguously a bad thing. 
C) increase, and that is unambiguously a good thing. 
D) increase, and that is unambiguously a bad thing. 
A) shrink, but that is unambiguously a good thing. 
B) shrink, and that is unambiguously a bad thing. 
C) increase, and that is unambiguously a good thing. 
D) increase, and that is unambiguously a bad thing.

Question 5

James is a resident of the U.S. and has accrued capital gains on an asset. If James dies prior to the realization of capital gains, ____.

Accepted Answer

A) his heirs will have to pay the tax on gains 
B) his heirs can sell the asset and the gains will be tax-free 
C) his heirs will not be able to sell the asset 
D) his heirs will have to pay a death tax along with the capital gains tax 
A) his heirs will have to pay the tax on gains 
B) his heirs can sell the asset and the gains will be tax-free 
C) his heirs will not be able to sell the asset 
D) his heirs will have to pay a death tax along with the capital gains tax

Question 6

According to the Pew Charitable Trust methodology for identifying the middle class, the bottom end of the middle class is ____ of median family income and the top end is ____.

Accepted Answer

A) 50%; 150% 
B) 67%; 200% 
C) 40%; 60% 
D) 100%; 200% 
A) 50%; 150% 
B) 67%; 200% 
C) 40%; 60% 
D) 100%; 200%

Question 7

Which of the following statements is true of the trends in wealth inequality?

Accepted Answer

A) The share of the bottom 90 percent, which was 67% in 1989, grew to 75.3% by 2013. 
B) The wealth shares of the bottom 90 percent and top 10 percent have increased by 30% from 1989 to 2013. 
C) The share of the top 10 percent, which was 67% in 1989, grew to 75.3% by 2013. 
D) The wealth shares of the bottom 90 percent and top 10 percent have decreased by 30% from 1989 to 2013. 
A) The share of the bottom 90 percent, which was 67% in 1989, grew to 75.3% by 2013. 
B) The wealth shares of the bottom 90 percent and top 10 percent have increased by 30% from 1989 to 2013. 
C) The share of the top 10 percent, which was 67% in 1989, grew to 75.3% by 2013. 
D) The wealth shares of the bottom 90 percent and top 10 percent have decreased by 30% from 1989 to 2013.

Question 8

Which of the following statements is true of wealth share of the bottom half and the upper-middle class households in the United States?

Accepted Answer

A) The wealth shares of bottom half households have declined, whereas the wealth shares of the upper-middle class households have increased since 1989. 
B) The wealth shares of both household types have seen a systematic rise since 1989. 
C) The wealth shares of both household types have seen a systematic decline since 1989. 
D) The wealth shares of bottom half households have increased, whereas the wealth shares of the upper-middle class households have declined since 1989. 
A) The wealth shares of bottom half households have declined, whereas the wealth shares of the upper-middle class households have increased since 1989. 
B) The wealth shares of both household types have seen a systematic rise since 1989. 
C) The wealth shares of both household types have seen a systematic decline since 1989. 
D) The wealth shares of bottom half households have increased, whereas the wealth shares of the upper-middle class households have declined since 1989.

Question 9

Adjusting the conventional measure of income inequality for the increase in income tax returns resulted in:

Accepted Answer

A) a 1.4% decrease in the top 1 percent's systemic income share during 1968 to 2007. 
B) a 2% increase in the bottom 99 percent's systemic income share during 1968 to 2007. 
C) a 1.4% increase in the top 1 percent's systemic income share during 1968 to 2007. 
D) a 2% decrease in the bottom 99 percent's systemic income share during 1968 to 2007. 
A) a 1.4% decrease in the top 1 percent's systemic income share during 1968 to 2007. 
B) a 2% increase in the bottom 99 percent's systemic income share during 1968 to 2007. 
C) a 1.4% increase in the top 1 percent's systemic income share during 1968 to 2007. 
D) a 2% decrease in the bottom 99 percent's systemic income share during 1968 to 2007.

Question 10

Which of the following is true of refundable tax credits?

Accepted Answer

A) It led to a decrease in the number of income tax returns filed during the 2000s. 
B) It resulted in a decrease in tax filings while population increased during the 1980s. 
C) It included Child Tax Credit but not Earned Income Tax Credit. 
D) It increased the number of low-earning households filing tax returns. 
A) It led to a decrease in the number of income tax returns filed during the 2000s. 
B) It resulted in a decrease in tax filings while population increased during the 1980s. 
C) It included Child Tax Credit but not Earned Income Tax Credit. 
D) It increased the number of low-earning households filing tax returns.

Question 11

James is a resident of the U.S. and has accrued capital gains on an asset. If James sells the asset, _____.

Accepted Answer

A) he will realize the gain and owe capital gains tax 
B) the buyer of the asset will owe capital gains tax 
C) his capital gain will be tax free 
D) its purchase price will include the amount of capital gains tax payable 
A) he will realize the gain and owe capital gains tax 
B) the buyer of the asset will owe capital gains tax 
C) his capital gain will be tax free 
D) its purchase price will include the amount of capital gains tax payable

Question 12

Which of the following is a significant change in public policy in the U.S. since the 1980s?

Accepted Answer

A) Decline in tax rates on capital gains 
B) Increase in tax rates on carried interests 
C) Significant increase in inheritance tax rates 
D) Significant decrease in property tax rates 
A) Decline in tax rates on capital gains 
B) Increase in tax rates on carried interests 
C) Significant increase in inheritance tax rates 
D) Significant decrease in property tax rates

Question 13

The _____ households faired very well during the period after 1995 in their wealth shares.

Accepted Answer

A) top 1 percent 
B) top 90-99 percent 
C) upper-middle class 
D) bottom half 
A) top 1 percent 
B) top 90-99 percent 
C) upper-middle class 
D) bottom half

Question 14

During which year was the top 1 percent households' share of wealth higher than the top 90-99 percent share in the United States?

Accepted Answer

A) 1989 
B) 1992 
C) 1995 
D) 1998 
A) 1989 
B) 1992 
C) 1995 
D) 1998

Question 15

When the housing bubble collapsed, _____.

Accepted Answer

A) the median household's wealth fell by 40% 
B) the mean household's wealth fell by 40% 
C) the median household's wealth increased by 15% 
D) the mean household's wealth increased by 15% 
A) the median household's wealth fell by 40% 
B) the mean household's wealth fell by 40% 
C) the median household's wealth increased by 15% 
D) the mean household's wealth increased by 15%

Question 16

Which of the following is a source of data on the press measure of income inequality in the United States?

Accepted Answer

A) The Federal Reserve 
B) The Internal Revenue Service 
C) Survey of Labor and Income 
D) Survey of Consumer Finances 
A) The Federal Reserve 
B) The Internal Revenue Service 
C) Survey of Labor and Income 
D) Survey of Consumer Finances

Question 17

According to the Pew Charitable Trust methodology for identifying the middle class, for the period from 1971 to 2015, the highest income class has

Accepted Answer

A) increased from 16% to 20% of the population. 
B) increased from 4% to 9% of the population. 
C) decreased from 9% to 4% of the population. 
D) decreased from 30% to 6% of the population. 
A) increased from 16% to 20% of the population. 
B) increased from 4% to 9% of the population. 
C) decreased from 9% to 4% of the population. 
D) decreased from 30% to 6% of the population.

Question 18

The U.S. claim to be "the land of opportunity" is not backed by recent data because a study by Miles Corak shows that:

Accepted Answer

A) it has very high capital gains tax rates. 
B) it does not have a high value of intergenerational income elasticity. 
C) there is a weak relationship between parental and child income in the U.S. 
D) it has a very high level of income mobility. 
A) it has very high capital gains tax rates. 
B) it does not have a high value of intergenerational income elasticity. 
C) there is a weak relationship between parental and child income in the U.S. 
D) it has a very high level of income mobility.

Question 19

Which of the following was true regarding conventionally measured income inequality in the U.S. during 1968 to 2007?

Accepted Answer

A) The income share of the top 1% of income earners tripled over this period. 
B) The income share of the top 25% of income earners remained below 60% during 1968-2007. 
C) There was a steady decline in the income share of the top 5% of income earners during this period. 
D) The conventional measure of income inequality showed that it was significantly low during this period compared to any other time period. 
A) The income share of the top 1% of income earners tripled over this period. 
B) The income share of the top 25% of income earners remained below 60% during 1968-2007. 
C) There was a steady decline in the income share of the top 5% of income earners during this period. 
D) The conventional measure of income inequality showed that it was significantly low during this period compared to any other time period.

Question 20

If there is a 20 percentage point drop in the maximum capital gains tax rate, _____percentage points of the increase in the share of the 1 percent can be attributed to the drop in the capital gains tax rate.

Accepted Answer

A) 4 
B) 8 
C) 20 
D) 36 
A) 4 
B) 8 
C) 20 
D) 36

Exam 31: Income and Wealth Inequality

The top 1 percent share of income in the United States was only _____ percent in 1978 as compared to _____ in 2007.

Which of the following is true of the increase in the wealth of households during 2001 to 2007?

As a result of public policy changes in the U.S. since the 1980s, _____.

According to the Pew Charitable Trust methodology for identifying the middle class, if people near the boundary between the lowest and the lower middle income class gain more income, the middle class will ___

James is a resident of the U.S. and has accrued capital gains on an asset. If James dies prior to the realization of capital gains, ____.

According to the Pew Charitable Trust methodology for identifying the middle class, the bottom end of the middle class is ____ of median family income and the top end is ____.

Which of the following statements is true of the trends in wealth inequality?

Which of the following statements is true of wealth share of the bottom half and the upper-middle class households in the United States?

Adjusting the conventional measure of income inequality for the increase in income tax returns resulted in:

Which of the following is true of refundable tax credits?

James is a resident of the U.S. and has accrued capital gains on an asset. If James sells the asset, _____.

Which of the following is a significant change in public policy in the U.S. since the 1980s?

The _____ households faired very well during the period after 1995 in their wealth shares.

During which year was the top 1 percent households' share of wealth higher than the top 90-99 percent share in the United States?

When the housing bubble collapsed, _____.

Which of the following is a source of data on the press measure of income inequality in the United States?

According to the Pew Charitable Trust methodology for identifying the middle class, for the period from 1971 to 2015, the highest income class has

The U.S. claim to be "the land of opportunity" is not backed by recent data because a study by Miles Corak shows that:

Which of the following was true regarding conventionally measured income inequality in the U.S. during 1968 to 2007?

If there is a 20 percentage point drop in the maximum capital gains tax rate, _____percentage points of the increase in the share of the 1 percent can be attributed to the drop in the capital gains tax rate.

Economics: the Study of Opportunity Cost

Supply and Demand

The Concept of Elasticity and Consumer and Producer Surplus

Firm Production, Cost, and Revenue

Perfect Competition, Monopoly, and Economic Versus Normal Profit

Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, Depression

Interest Rates and Present Value

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Policy

Federal Spending

Federal Deficits, Surpluses, and the National Debt

The Housing Bubble

The Recession of 2007-2009: Causes and Policy Responses

Is Economic Stagnation the New Normal

Is the Fiscalsky Falling: An Examination of Unfunded Social Security, Medicare, and State and Local Pension Liabilities

International Trade: Does It Jeopardize American Jobs

International Finance and Exchange Rates

The European Debt Crisis

Economic Growth and Development

Nafta, Gatt, Wto: Are Trade Agreements Good for Us

The Line Between Legal and Illegal Goods

Natural Resources, the Environment, and Climate Change

Health Care

Government-Provided Health Insurance: Medicaid, Medicare, and the Child Health Insurance Program

The Economics of Prescription Drugs

So You Want to Be a Lawyer: Economics and the Law

The Economics of Crime

Antitrust

The Economics of Race and Discrimination

Farm Policy

Minimum Wage

Ticket Brokers and Ticket Scalping

Rent Control

Economics of K-12 Education

Economics of College and University Education

Poverty and Welfare

Head Start

Social Security

Personal Income Taxes

Energy Prices

If We Build It, Will They Come and Other Sports Questions

The Stock Market Crashes

Unions

Walmart: Always Low Prices and Low Wages- Always

The Economic Impact of Casino Gambling

The Economics of Terrorism

Filters

The top 1 percent share of income in the United States was only _ percent in 1978 as compared to _ in 2007.

According to the Pew Charitable Trust methodology for identifying the middle class, the bottom end of the middle class is of median family income and the top end is .