Question 1

The greater the area between the Lorenz curve and the diagonal in the Lorenz curve diagram,the:

Accepted Answer

A)  smaller is the Gini ratio and the greater is the degree of income inequality. 
B)  larger is the Gini ratio and the greater is the degree of income inequality. 
C)  smaller is the Gini ratio and the lesser is the degree of income inequality. 
D)  larger is the Gini ratio and the lesser is the degree of income inequality. 
A)  smaller is the Gini ratio and the greater is the degree of income inequality. 
B)  larger is the Gini ratio and the greater is the degree of income inequality. 
C)  smaller is the Gini ratio and the lesser is the degree of income inequality. 
D)  larger is the Gini ratio and the lesser is the degree of income inequality.

Question 2

In the United States:

Accepted Answer

A)  taxes decrease,but transfers increase,income inequality. 
B)  taxes increase,but transfers reduce,income inequality. 
C)  both taxes and transfers decrease income inequality. 
D)  both taxes and transfers increase income inequality. 
A)  taxes decrease,but transfers increase,income inequality. 
B)  taxes increase,but transfers reduce,income inequality. 
C)  both taxes and transfers decrease income inequality. 
D)  both taxes and transfers increase income inequality.

Question 3

Assume that all workers are equally productive,but the wage rate for men is $12 compared to $9 for women.An employer who employs only male workers must have a discrimination coefficient of:

Accepted Answer

A)  more than $3. 
B)  at most 0.3. 
C)  less than $3. 
D)  1.33 or less. 
A)  more than $3. 
B)  at most 0.3. 
C)  less than $3. 
D)  1.33 or less.

Question 4

A particular woman is denied on-the-job training because women on average are more likely to drop out of the workforce than men.This illustrates:

Accepted Answer

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

Question 5

In 2011,the average income for households in the United States was about:

Accepted Answer

A)  $69,821. 
B)  $42,820. 
C)  $56,610. 
D)  $64,842. 
A)  $69,821. 
B)  $42,820. 
C)  $56,610. 
D)  $64,842.

Question 6

The equality-efficiency trade-off refers to:

Accepted Answer

A)  the conflict between risk averters and risk takers. 
B)  the willingness of Congress to abandon existing welfare programs in favor of a comprehensive plan to increase education and training for low-income persons. 
C)  possible conflicts between the goals of economic efficiency and greater income equality. 
D)  the difference between the goals of income equality and equality of economic opportunity. 
A)  the conflict between risk averters and risk takers. 
B)  the willingness of Congress to abandon existing welfare programs in favor of a comprehensive plan to increase education and training for low-income persons. 
C)  possible conflicts between the goals of economic efficiency and greater income equality. 
D)  the difference between the goals of income equality and equality of economic opportunity.

Question 7

A reduction in the collective discrimination coefficients of employers will increase the wage rate of those discriminated against but reduce their employment.

Accepted Answer

A) True 
 B)False

Question 8

Income mobility:

Accepted Answer

A)  contributes to greater wealth inequality in the United States. 
B)  is less in the United States than in most developing nations. 
C)  is the movement of individuals and households from one income quintile to another over time. 
D)  makes lifetime income inequality among income receivers in the United States greater than income inequality in any single year. 
A)  contributes to greater wealth inequality in the United States. 
B)  is less in the United States than in most developing nations. 
C)  is the movement of individuals and households from one income quintile to another over time. 
D)  makes lifetime income inequality among income receivers in the United States greater than income inequality in any single year.

Question 9

Which of the following groups has the highest poverty rate?

Accepted Answer

A)  Age 65 or over. 
B)  Foreign-born (not citizens). 
C)  Hispanics. 
D)  Female-headed households. 
A)  Age 65 or over. 
B)  Foreign-born (not citizens). 
C)  Hispanics. 
D)  Female-headed households.

Question 10

Which of the following provides public assistance to those who are blind and otherwise disabled?

Accepted Answer

A)  Medicare. 
B)  Supplemental Security Income (SSI). 
C)  Medicaid. 
D)  TANF. 
A)  Medicare. 
B)  Supplemental Security Income (SSI). 
C)  Medicaid. 
D)  TANF.

Question 11

An example of a social insurance program is ____________,whereas an example of a public assistance program is _______.

Accepted Answer

A)  Temporary Assistance for Needy Families;unemployment compensation 
B)  Supplemental Security Income;unemployment compensation 
C)  Social Security;Supplemental Nutrition Assistance Program 
D)  Medicaid;Medicare 
A)  Temporary Assistance for Needy Families;unemployment compensation 
B)  Supplemental Security Income;unemployment compensation 
C)  Social Security;Supplemental Nutrition Assistance Program 
D)  Medicaid;Medicare

Question 12

Since 1980 the difference between the earnings of college graduates and high school graduates has:

Accepted Answer

A)  fallen,thereby increasing income inequality. 
B)  increased,thereby increasing income inequality. 
C)  remained constant. 
D)  increased,thereby decreasing income inequality. 
A)  fallen,thereby increasing income inequality. 
B)  increased,thereby increasing income inequality. 
C)  remained constant. 
D)  increased,thereby decreasing income inequality.

Question 13

Which of the following is correct?

Accepted Answer

A)  Income is a stock and wealth is a flow concept. 
B)  Both income and wealth are flow concepts. 
C)  Both income and wealth are stock concepts. 
D)  Income is a flow and wealth is a stock concept. 
A)  Income is a stock and wealth is a flow concept. 
B)  Both income and wealth are flow concepts. 
C)  Both income and wealth are stock concepts. 
D)  Income is a flow and wealth is a stock concept.

Question 14

Which of the following would move the Lorenz curve closer to the diagonal?

Accepted Answer

A)  A 20 percent boost in Social Security retirement benefits. 
B)  An increase in payroll taxes. 
C)  A reduction in the progressiveness of the federal personal income tax. 
D)  The elimination of the TANF program. 
A)  A 20 percent boost in Social Security retirement benefits. 
B)  An increase in payroll taxes. 
C)  A reduction in the progressiveness of the federal personal income tax. 
D)  The elimination of the TANF program.

Question 15

Discrimination:

Accepted Answer

A)  affects the distribution of domestic output and income,but not its total size. 
B)  is shown as some point outside of an economy's production possibilities curve. 
C)  places the economy at some point inside of its production possibilities curve. 
D)  affects the total size of domestic output and income but not its distribution. 
A)  affects the distribution of domestic output and income,but not its total size. 
B)  is shown as some point outside of an economy's production possibilities curve. 
C)  places the economy at some point inside of its production possibilities curve. 
D)  affects the total size of domestic output and income but not its distribution.

Question 16

The earned-income tax credit:

Accepted Answer

A)  increases the personal income tax liability of low-income working families. 
B)  provides a cash payment to low-income working families if their tax credit exceeds their tax liability. 
C)  is designed to make labor force employment less attractive. 
D)  was eliminated as part of welfare reform in 1996. 
A)  increases the personal income tax liability of low-income working families. 
B)  provides a cash payment to low-income working families if their tax credit exceeds their tax liability. 
C)  is designed to make labor force employment less attractive. 
D)  was eliminated as part of welfare reform in 1996.

Question 17

Median wealth in the United States in 2010:

Accepted Answer

A)  was about the same as in 1995. 
B)  had grown by about 8 percent since 1995. 
C)  was nearly 8 percent lower than in 1995. 
D)  was about $84,000. 
A)  was about the same as in 1995. 
B)  had grown by about 8 percent since 1995. 
C)  was nearly 8 percent lower than in 1995. 
D)  was about $84,000.

Question 18

(Consider This)The main focus of the vignette "Slicing the Pizza" is the:

Accepted Answer

A)  equality-efficiency trade-off. 
B)  principal-agent problem. 
C)  impact of market power on economic efficiency. 
D)  the highly unequal distribution of U.S.wealth. 
A)  equality-efficiency trade-off. 
B)  principal-agent problem. 
C)  impact of market power on economic efficiency. 
D)  the highly unequal distribution of U.S.wealth.

Question 19

(Consider This)According to economists Krueger and Perri:

Accepted Answer

A)  despite the fact that income inequality has increased in recent decades,consumption inequality has remained relatively constant. 
B)  increases in income inequality over recent decades understate the growth in consumption inequality. 
C)  both income and consumption inequality have increased at approximately the same rate over recent decades. 
D)  both income and consumption are more equally distributed than they were 30 years ago. 
A)  despite the fact that income inequality has increased in recent decades,consumption inequality has remained relatively constant. 
B)  increases in income inequality over recent decades understate the growth in consumption inequality. 
C)  both income and consumption inequality have increased at approximately the same rate over recent decades. 
D)  both income and consumption are more equally distributed than they were 30 years ago.

Question 20

According to the standard government definitions,the percentage of the U.S.population now (2011)considered to be living in poverty is about:

Accepted Answer

A)  15.0 percent. 
B)  20.5 percent. 
C)  9.8 percent. 
D)  13.2 percent. 
A)  15.0 percent. 
B)  20.5 percent. 
C)  9.8 percent. 
D)  13.2 percent.

Exam 22: Income Inequality Poverty and Discrimination

The greater the area between the Lorenz curve and the diagonal in the Lorenz curve diagram,the:

In the United States:

Assume that all workers are equally productive,but the wage rate for men is $12 compared to $9 for women.An employer who employs only male workers must have a discrimination coefficient of:

A particular woman is denied on-the-job training because women on average are more likely to drop out of the workforce than men.This illustrates:

In 2011,the average income for households in the United States was about:

The equality-efficiency trade-off refers to:

A reduction in the collective discrimination coefficients of employers will increase the wage rate of those discriminated against but reduce their employment.

Income mobility:

Which of the following groups has the highest poverty rate?

Which of the following provides public assistance to those who are blind and otherwise disabled?

An example of a social insurance program is ____________,whereas an example of a public assistance program is _______.

Since 1980 the difference between the earnings of college graduates and high school graduates has:

Which of the following is correct?

Which of the following would move the Lorenz curve closer to the diagonal?

Discrimination:

The earned-income tax credit:

Median wealth in the United States in 2010:

(Consider This)The main focus of the vignette "Slicing the Pizza" is the:

(Consider This)According to economists Krueger and Perri:

According to the standard government definitions,the percentage of the U.S.population now (2011)considered to be living in poverty is about:

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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An example of a social insurance program is ______,whereas an example of a public assistance program is _.