Question 1

Each of the following has contributed to growing income inequality in the United States since 1975 except:

Accepted Answer

A)  the decline in unionism. 
B)  greater demand for highly skilled workers. 
C)  stronger international competition from imports. 
D)  government transfers. 
A)  the decline in unionism. 
B)  greater demand for highly skilled workers. 
C)  stronger international competition from imports. 
D)  government transfers.

Question 2

If there is a widespread bias against African-American workers,an increase in the collective discrimination coefficients of employers will:

Accepted Answer

A)  reduce the African-American wage rate,increase African-American employment,and lower the actual African-American-white wage ratio. 
B)  reduce the African-American wage rate,decrease African-American employment,and lower the actual African-American-white wage ratio. 
C)  increase the African-American wage rate,increase African-American employment,and increase the actual African-American-white wage ratio. 
D)  increase the African-American wage rate,reduce African-American employment,and increase the actual African-American-white wage ratio. 
A)  reduce the African-American wage rate,increase African-American employment,and lower the actual African-American-white wage ratio. 
B)  reduce the African-American wage rate,decrease African-American employment,and lower the actual African-American-white wage ratio. 
C)  increase the African-American wage rate,increase African-American employment,and increase the actual African-American-white wage ratio. 
D)  increase the African-American wage rate,reduce African-American employment,and increase the actual African-American-white wage ratio.

Question 3

A curve showing the quintile distribution of a nation's income is called the Gini curve.

Accepted Answer

A) True 
 B)False

Question 4

Medicaid:

Accepted Answer

A)  helps finance medical expenses for those participating in the TANF and Supplemental Security Income programs. 
B)  has been abandoned in favor of privately provided medical insurance. 
C)  is a program of medical insurance for the aged and retired. 
D)  is a compulsory national health insurance program that only covers preventative medical services. 
A)  helps finance medical expenses for those participating in the TANF and Supplemental Security Income programs. 
B)  has been abandoned in favor of privately provided medical insurance. 
C)  is a program of medical insurance for the aged and retired. 
D)  is a compulsory national health insurance program that only covers preventative medical services.

Question 5

The Supplemental Nutrition Assistance Program (SNAP):

Accepted Answer

A)  was previously known as the food-stamp program. 
B)  added assistance to the food-stamp program by targeting children. 
C)  was created to supplement the food consumption of low-income Social Security recipients. 
D)  has been subject to widespread fraud through the illegal reproduction of paper food-stamp coupons. 
A)  was previously known as the food-stamp program. 
B)  added assistance to the food-stamp program by targeting children. 
C)  was created to supplement the food consumption of low-income Social Security recipients. 
D)  has been subject to widespread fraud through the illegal reproduction of paper food-stamp coupons.

Question 6

Government transfer programs result in a U.S.Lorenz curve that is closer to the diagonal line than would be the case without the programs.

Accepted Answer

A) True 
 B)False

Question 7

Some economists have criticized standard government figures on income inequality,arguing that these data:

Accepted Answer

A)  exclude households whose earnings arise in the public sector. 
B)  conceal the strong trend toward greater equality in household sizes. 
C)  conceal the growth of poverty due to a growing number of discouraged workers. 
D)  overstate the degree of income inequality by failing to include noncash transfers as income. 
A)  exclude households whose earnings arise in the public sector. 
B)  conceal the strong trend toward greater equality in household sizes. 
C)  conceal the growth of poverty due to a growing number of discouraged workers. 
D)  overstate the degree of income inequality by failing to include noncash transfers as income.

Question 8

The movement of individuals and households from one income quintile to another over time is called:

Accepted Answer

A)  income averaging. 
B)  wealth turnover. 
C)  income mobility. 
D)  the ratchet effect. 
A)  income averaging. 
B)  wealth turnover. 
C)  income mobility. 
D)  the ratchet effect.

Question 9

In 2011,a household with an annual income of $75,000 would find itself in the:

Accepted Answer

A)  second lowest quintile of the household income distribution. 
B)  third quintile of the household income distribution. 
C)  fourth quintile of the household income distribution. 
D)  fifth (highest)quintile of the household income distribution. 
A)  second lowest quintile of the household income distribution. 
B)  third quintile of the household income distribution. 
C)  fourth quintile of the household income distribution. 
D)  fifth (highest)quintile of the household income distribution.

Question 10

Which of the following helps explain growing income inequality in the United States in recent years?

Accepted Answer

A)  Reduced immigration. 
B)  Increased demand for highly skilled workers. 
C)  The falling labor force participation rate of women. 
D)  Increased power of unions. 
A)  Reduced immigration. 
B)  Increased demand for highly skilled workers. 
C)  The falling labor force participation rate of women. 
D)  Increased power of unions.

Question 11

Statistical discrimination is also known as occupational discrimination.

Accepted Answer

A) True 
 B)False

Question 12

Income mobility:

Accepted Answer

A)  makes lifetime income inequality among income receivers in the United States less than income inequality in any single year. 
B)  is less in the United States than in most developing nations. 
C)  refers to the movement of wage earners from one job to another. 
D)  reduces the total percentage of households in the lowest quintile of the income distribution over time. 
A)  makes lifetime income inequality among income receivers in the United States less than income inequality in any single year. 
B)  is less in the United States than in most developing nations. 
C)  refers to the movement of wage earners from one job to another. 
D)  reduces the total percentage of households in the lowest quintile of the income distribution over time.

Question 13

Economic discrimination puts the economy inside its production possibilities curve because discrimination:

Accepted Answer

A)  redistributes income from low-paid to high-paid persons. 
B)  promotes present consumption rather than production of capital goods. 
C)  arbitrarily blocks women and certain minorities from higher-productivity,higher-wage jobs and thus keeps the economy from producing its maximum output. 
D)  often causes inflation,which reduces the nation's real output. 
A)  redistributes income from low-paid to high-paid persons. 
B)  promotes present consumption rather than production of capital goods. 
C)  arbitrarily blocks women and certain minorities from higher-productivity,higher-wage jobs and thus keeps the economy from producing its maximum output. 
D)  often causes inflation,which reduces the nation's real output.

Question 14

An employer is prejudiced,prefers to hire white rather than Hispanic workers,and is willing to pay higher wages to obtain white workers.This illustrates:

Accepted Answer

A)  reverse discrimination. 
B)  the crowding model. 
C)  the taste-for-discrimination model. 
D)  statistical discrimination. 
A)  reverse discrimination. 
B)  the crowding model. 
C)  the taste-for-discrimination model. 
D)  statistical discrimination.

Question 15

Suppose Copernicus Corporation hires Damon Danielson rather than Elmer Ellison,simply because Damon is a graduate of an Ivy League school while Elmer is a graduate of a small public university.Elmer is actually more qualified than Damon.This is an example of:

Accepted Answer

A)  statistical discrimination. 
B)  irrational behavior. 
C)  monopsony exploitation. 
D)  human-capital discrimination. 
A)  statistical discrimination. 
B)  irrational behavior. 
C)  monopsony exploitation. 
D)  human-capital discrimination.

Question 16

As applied to gender discrimination,the crowding model of occupational segregation:

Accepted Answer

A)  helps explain why women earn more than men. 
B)  predicts that men's wages would fall and women's wages would rise if occupational segregation was eliminated. 
C)  predicts that domestic output would decline if occupational segregation was ended. 
D)  predicts that competition will eventually totally end discrimination. 
A)  helps explain why women earn more than men. 
B)  predicts that men's wages would fall and women's wages would rise if occupational segregation was eliminated. 
C)  predicts that domestic output would decline if occupational segregation was ended. 
D)  predicts that competition will eventually totally end discrimination.

Question 17

Which one of the following would increase income inequality as measured by official Census data and the quintile distribution?

Accepted Answer

A)  A doubling of Social Security retirement benefits. 
B)  The elimination of the SNAP program. 
C)  The elimination of the TANF program. 
D)  Reduced divorce rates. 
A)  A doubling of Social Security retirement benefits. 
B)  The elimination of the SNAP program. 
C)  The elimination of the TANF program. 
D)  Reduced divorce rates.

Question 18

The term "growing income inequality" implies that the:

Accepted Answer

A)  poor are getting poorer in both a relative and an absolute sense. 
B)  Lorenz curve is shifting toward the diagonal. 
C)  diagonal is shifting toward the Lorenz curve. 
D)  upper quintiles of income receivers are getting relatively more of the total income than before and the lower quintiles are getting relatively less. 
A)  poor are getting poorer in both a relative and an absolute sense. 
B)  Lorenz curve is shifting toward the diagonal. 
C)  diagonal is shifting toward the Lorenz curve. 
D)  upper quintiles of income receivers are getting relatively more of the total income than before and the lower quintiles are getting relatively less.

Question 19

Which of the following would we expect to have the highest poverty rate?

Accepted Answer

A)  White households headed by males. 
B)  Elderly white households. 
C)  White households headed by females. 
D)  African-American households headed by females. 
A)  White households headed by males. 
B)  Elderly white households. 
C)  White households headed by females. 
D)  African-American households headed by females.

Question 20

Social Security is financed:

Accepted Answer

A)  by state income tax revenues. 
B)  by payroll taxes on employees and employers. 
C)  by federal excise taxes. 
D)  out of general tax revenues. 
A)  by state income tax revenues. 
B)  by payroll taxes on employees and employers. 
C)  by federal excise taxes. 
D)  out of general tax revenues.

Exam 22: Income Inequality Poverty and Discrimination

Each of the following has contributed to growing income inequality in the United States since 1975 except:

If there is a widespread bias against African-American workers,an increase in the collective discrimination coefficients of employers will:

A curve showing the quintile distribution of a nation's income is called the Gini curve.

Medicaid:

The Supplemental Nutrition Assistance Program (SNAP):

Government transfer programs result in a U.S.Lorenz curve that is closer to the diagonal line than would be the case without the programs.

Some economists have criticized standard government figures on income inequality,arguing that these data:

The movement of individuals and households from one income quintile to another over time is called:

In 2011,a household with an annual income of $75,000 would find itself in the:

Which of the following helps explain growing income inequality in the United States in recent years?

Statistical discrimination is also known as occupational discrimination.

Income mobility:

Economic discrimination puts the economy inside its production possibilities curve because discrimination:

An employer is prejudiced,prefers to hire white rather than Hispanic workers,and is willing to pay higher wages to obtain white workers.This illustrates:

Suppose Copernicus Corporation hires Damon Danielson rather than Elmer Ellison,simply because Damon is a graduate of an Ivy League school while Elmer is a graduate of a small public university.Elmer is actually more qualified than Damon.This is an example of:

As applied to gender discrimination,the crowding model of occupational segregation:

Which one of the following would increase income inequality as measured by official Census data and the quintile distribution?

The term "growing income inequality" implies that the:

Which of the following would we expect to have the highest poverty rate?

Social Security is financed:

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

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