Question 1

In the study conducted by Miles Corak, which of the following countries had the weakest relationship between parental and child income?

Accepted Answer

A) United States 
B) United Kingdom 
C) France 
D) Denmark 
A) United States 
B) United Kingdom 
C) France 
D) Denmark

Question 2

During 1971-1998, the new _____ and greatly expanded EITC created a motivation for the low-earning households to file returns when they were not legally required to do so.

Accepted Answer

A) Child Tax Credit 
B) Working Tax Credit 
C) Earned Income Credit 
D) Retirement Savings Credit 
A) Child Tax Credit 
B) Working Tax Credit 
C) Earned Income Credit 
D) Retirement Savings Credit

Question 3

A decrease in the capital gains tax rate:

Accepted Answer

A) would be reflected in a decrease in the observed measure of the share of income of the top 1%. 
B) would be reflected in an increase in the observed measure of the share of income of the bottom 99%. 
C) would be reflected in a decrease in the observed measure of the share of income of the bottom 99%. 
D) would be reflected in an increase in the observed measure of the share of income of the top 1%. 
A) would be reflected in a decrease in the observed measure of the share of income of the top 1%. 
B) would be reflected in an increase in the observed measure of the share of income of the bottom 99%. 
C) would be reflected in a decrease in the observed measure of the share of income of the bottom 99%. 
D) would be reflected in an increase in the observed measure of the share of income of the top 1%.

Question 4

Which of the following contributed to the increase in household and wealth inequalities in the U.S?

Accepted Answer

A) A decline of union-represented manufacturing employees 
B) A decrease in jobs performed by intellectually challenging labor 
C) An increase in service sector jobs 
D) An increase in the participation of women in the labor force 
A) A decline of union-represented manufacturing employees 
B) A decrease in jobs performed by intellectually challenging labor 
C) An increase in service sector jobs 
D) An increase in the participation of women in the labor force

Question 5

Capital gains are those gains

Accepted Answer

A) earned from avoiding tax payments by understating earnings from capital assets. 
B) earned from purchasing an asset for less than what it is actually worth. 
C) earned from selling an asset prior to its maturity date. 
D) earned from selling an asset for a price more than what was paid for it. 
A) earned from avoiding tax payments by understating earnings from capital assets. 
B) earned from purchasing an asset for less than what it is actually worth. 
C) earned from selling an asset prior to its maturity date. 
D) earned from selling an asset for a price more than what was paid for it.

Question 6

Which of the following is true of the taxation of capital gains in the United States?

Accepted Answer

A) Short-term capital gains are not taxed. 
B) The tax cannot be deferred. 
C) It is taxed on accrual. 
D) It is taxed on realization. 
A) Short-term capital gains are not taxed. 
B) The tax cannot be deferred. 
C) It is taxed on accrual. 
D) It is taxed on realization.

Question 7

In the United States, the data on wealth concentrations is collected by the

Accepted Answer

A) University of Chicago for the Federal Reserve. 
B) University of Michigan for the Federal Reserve. 
C) United States Treasury Department. 
D) Department of Economic Affairs. 
A) University of Chicago for the Federal Reserve. 
B) University of Michigan for the Federal Reserve. 
C) United States Treasury Department. 
D) Department of Economic Affairs.

Question 8

Which of the following statements is true?

Accepted Answer

A) The capital gains tax rate reached its all-time low during 2003-2012 in the U.S. 
B) The capital gains tax rate reached its all-time low during the 1970s in the U.S. 
C) The capital gains tax rate was nearly 40 percent during 2003-2012 in the U.S. 
D) The incomes of the top 1 percent were likely overstated in early 2000s in the U.S. 
A) The capital gains tax rate reached its all-time low during 2003-2012 in the U.S. 
B) The capital gains tax rate reached its all-time low during the 1970s in the U.S. 
C) The capital gains tax rate was nearly 40 percent during 2003-2012 in the U.S. 
D) The incomes of the top 1 percent were likely overstated in early 2000s in the U.S.

Question 9

According to the Pew Charitable Trust methodology for identifying the middle class, if people near the boundary between the upper middle and highest 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, but 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, but that is unambiguously a good thing. 
D) increase, and that is unambiguously a bad thing.

Question 10

Which period saw the biggest increase in systemic income inequality measured conventionally?

Accepted Answer

A) 1980s and 1990s 
B) 2000s 
C) 1960s and 1970s 
D) 1950s 
A) 1980s and 1990s 
B) 2000s 
C) 1960s and 1970s 
D) 1950s

Question 11

Which of the following statements is true of capital gains in the U.S.?

Accepted Answer

A) Capital gains are forgiven at death. 
B) Capital gains are taxed on accrual. 
C) Capital gains are taxed only for low-income groups. 
D) Capital gains are taxed only if they are long-term. 
A) Capital gains are forgiven at death. 
B) Capital gains are taxed on accrual. 
C) Capital gains are taxed only for low-income groups. 
D) Capital gains are taxed only if they are long-term.

Question 12

Which of the following is a benefit of income inequality?

Accepted Answer

A) It motivates people to be at the high end of income distribution. 
B) It promotes economic growth in the less developed economies. 
C) It reduces the intensity of business fluctuations in an economy. 
D) It reduces the taxes to be paid by the ones in the low end of income distribution. 
A) It motivates people to be at the high end of income distribution. 
B) It promotes economic growth in the less developed economies. 
C) It reduces the intensity of business fluctuations in an economy. 
D) It reduces the taxes to be paid by the ones in the low end of income distribution.

Question 13

Which of the following was a problem with using the conventional press measure of income inequality during 1971-1998?

Accepted Answer

A) There was a rapid decrease in the income tax filings during the period between 1971 and 1998. 
B) There was a rapid increase in the income tax filings during the period between 1971 and 1998. 
C) There was a rapid increase in the working class population during the period between 1971 and 1998. 
D) There was a rapid decrease in the working class population during the period between 1971 and 1998. 
A) There was a rapid decrease in the income tax filings during the period between 1971 and 1998. 
B) There was a rapid increase in the income tax filings during the period between 1971 and 1998. 
C) There was a rapid increase in the working class population during the period between 1971 and 1998. 
D) There was a rapid decrease in the working class population during the period between 1971 and 1998.

Question 14

Prior to the 1960s, _____.

Accepted Answer

A) the majority of American savers were from the higher end of the income scale 
B) the majority of financial capital was generated from abroad 
C) the capital gains tax was at an all-time high of 50% 
D) American savers were spread across all categories of the income scale 
A) the majority of American savers were from the higher end of the income scale 
B) the majority of financial capital was generated from abroad 
C) the capital gains tax was at an all-time high of 50% 
D) American savers were spread across all categories of the income scale

Question 15

According to the Pew Charitable Trust methodology for identifying the middle class, in 2014 the bottom end of the middle class is ____ and the top end is ____.

Accepted Answer

A) $42,000; $126,000 
B) $50,000; $75,000 
C) $30,000; $250,000 
D) $75,000; $300,000 
A) $42,000; $126,000 
B) $50,000; $75,000 
C) $30,000; $250,000 
D) $75,000; $300,000

Question 16

Which of the following is a cost of high income inequality?

Accepted Answer

A) Capital flight 
B) Sticky wages 
C) Social disorder 
D) Hyperinflation 
A) Capital flight 
B) Sticky wages 
C) Social disorder 
D) Hyperinflation

Question 17

The negative impacts of high income inequality on the society will be less significant if

Accepted Answer

A) those at the high end of the income distribution are not motivated to hold their positions. 
B) the poor believe that their poverty is a result of choices they made 
C) those at the bottom of the income distribution believe that the system is rigged in favor of the rich 
D) there is a high level of political influence in the working of the income distribution system 
A) those at the high end of the income distribution are not motivated to hold their positions. 
B) the poor believe that their poverty is a result of choices they made 
C) those at the bottom of the income distribution believe that the system is rigged in favor of the rich 
D) there is a high level of political influence in the working of the income distribution system

Question 18

When tax filings increase faster than increases in population, and when nearly all the extra filings are from individuals in the lower 99 percent income group

Accepted Answer

A) the number of people in the bottom 99 percent group decreases more than it would otherwise. 
B) the number of people in the bottom half group decreases more than it would otherwise. 
C) the number of people in the top 1 percent group decreases more than it would otherwise. 
D) the number of people in the top 1 percent group increases more than it would otherwise. 
A) the number of people in the bottom 99 percent group decreases more than it would otherwise. 
B) the number of people in the bottom half group decreases more than it would otherwise. 
C) the number of people in the top 1 percent group decreases more than it would otherwise. 
D) the number of people in the top 1 percent group increases more than it would otherwise.

Question 19

The costs of income inequalities in an economy can be reduced to an extent if there is _____.

Accepted Answer

A) capital flight 
B) income mobility 
C) regressive taxation 
D) labor rigidity 
A) capital flight 
B) income mobility 
C) regressive taxation 
D) labor rigidity

Question 20

Which of the following is the source of data on wealth concentrations in the United States?

Accepted Answer

A) Survey of Labor and Income 
B) Survey of Current Business 
C) Survey of Household Income and Wealth 
D) Survey of Consumer Finances 
A) Survey of Labor and Income 
B) Survey of Current Business 
C) Survey of Household Income and Wealth 
D) Survey of Consumer Finances

Exam 31: Income and Wealth Inequality

In the study conducted by Miles Corak, which of the following countries had the weakest relationship between parental and child income?

During 1971-1998, the new _____ and greatly expanded EITC created a motivation for the low-earning households to file returns when they were not legally required to do so.

A decrease in the capital gains tax rate:

Which of the following contributed to the increase in household and wealth inequalities in the U.S?

Capital gains are those gains

Which of the following is true of the taxation of capital gains in the United States?

In the United States, the data on wealth concentrations is collected by the

Which of the following statements is true?

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

Which period saw the biggest increase in systemic income inequality measured conventionally?

Which of the following statements is true of capital gains in the U.S.?

Which of the following is a benefit of income inequality?

Which of the following was a problem with using the conventional press measure of income inequality during 1971-1998?

Prior to the 1960s, _____.

According to the Pew Charitable Trust methodology for identifying the middle class, in 2014 the bottom end of the middle class is ____ and the top end is ____.

Which of the following is a cost of high income inequality?

The negative impacts of high income inequality on the society will be less significant if

When tax filings increase faster than increases in population, and when nearly all the extra filings are from individuals in the lower 99 percent income group

The costs of income inequalities in an economy can be reduced to an extent if there is _____.

Which of the following is the source of data on wealth concentrations in the United States?

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

According to the Pew Charitable Trust methodology for identifying the middle class, in 2014 the bottom end of the middle class is and the top end is .