Question 1

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 2

When measuring the benefits from investing in human capital

Accepted Answer

A)  the only benefits come from the increase in salary because of going to school. 
B)  in addition to the monetary benefits, the benefit from expanding horizons should be included. 
C)  we must include the costs of tuition and books but not the money made from part-time jobs. 
D)  we must include the foregone earnings in the benefit calculation. 
A)  the only benefits come from the increase in salary because of going to school. 
B)  in addition to the monetary benefits, the benefit from expanding horizons should be included. 
C)  we must include the costs of tuition and books but not the money made from part-time jobs. 
D)  we must include the foregone earnings in the benefit calculation.

Question 3

The productivity standard for the distribution of income can be thought of as

Accepted Answer

A)  rewarding people according to their ability to produce useful goods. 
B)  benefiting only the least productive worker. 
C)  proving that egalitarians are correct. 
D)  rewarding only the wealthy. 
A)  rewarding people according to their ability to produce useful goods. 
B)  benefiting only the least productive worker. 
C)  proving that egalitarians are correct. 
D)  rewarding only the wealthy.

Question 4

The return on wealth is

Accepted Answer

A)  a stock variable. 
B)  income. 
C)  equal to the opportunity cost of holding capital. 
D)  a stock or flow variable depending upon whether the wealth is in the form of bonds or other financial assets. 
A)  a stock variable. 
B)  income. 
C)  equal to the opportunity cost of holding capital. 
D)  a stock or flow variable depending upon whether the wealth is in the form of bonds or other financial assets.

Question 5

Relative poverty

Accepted Answer

A)  has been eliminated in the United States. 
B)  will always be with us. 
C)  has never existed in the United States. 
D)  can be eliminated in the next 20 years. 
A)  has been eliminated in the United States. 
B)  will always be with us. 
C)  has never existed in the United States. 
D)  can be eliminated in the next 20 years.

Question 6

-The country reflecting perfect income equality in the above figure is

Accepted Answer

A)  country 4. 
B)  country 1. 
C)  country 5. 
D)  country 3. 
A)  country 4. 
B)  country 1. 
C)  country 5. 
D)  country 3.

Question 7

Which of the following statements is an accurate statement about the Social Security (OASDI) program?

Accepted Answer

A)  The program is financed by voluntary contributions. 
B)  Only 50 percent of workers are covered by OASDI. 
C)  Benefits are based on financial need. 
D)  The program transfers income from those who work to those who do not work. 
A)  The program is financed by voluntary contributions. 
B)  Only 50 percent of workers are covered by OASDI. 
C)  Benefits are based on financial need. 
D)  The program transfers income from those who work to those who do not work.

Question 8

The health care market in the United States is characterized by

Accepted Answer

A)  considerable government involvement. 
B)  third-party payment of health care costs. 
C)  asymmetric information between providers and consumers. 
D)  all of the above 
A)  considerable government involvement. 
B)  third-party payment of health care costs. 
C)  asymmetric information between providers and consumers. 
D)  all of the above

Question 9

-Refer to the above figure. Which of the graphs are consistent with the age-earnings profile?

Accepted Answer

A)  Panel A 
B)  Panel B 
C)  Panel C 
D)  Panel D 
A)  Panel A 
B)  Panel B 
C)  Panel C 
D)  Panel D

Question 10

The original objective of Social Security was

Accepted Answer

A)  to provide retirement fund for all persons. 
B)  to prevent future depressions. 
C)  to raise the nation's saving rate. 
D)  a proper response to the stock market crash of 1929. 
A)  to provide retirement fund for all persons. 
B)  to prevent future depressions. 
C)  to raise the nation's saving rate. 
D)  a proper response to the stock market crash of 1929.

Question 11

-Use the information in the above table. The top 40 percent of the population earn

Accepted Answer

A)  66.7 percent of the income. 
B)  55.5 percent of the income. 
C)  50.0 percent of the income. 
D)  44.4 percent of the income. 
A)  66.7 percent of the income. 
B)  55.5 percent of the income. 
C)  50.0 percent of the income. 
D)  44.4 percent of the income.

Question 12

The idea that the Lorenz curve should be along the 45 degree line is consistent with

Accepted Answer

A)  the productivity standard. 
B)  the egalitarian principle. 
C)  the conservative principle. 
D)  none of the above. 
A)  the productivity standard. 
B)  the egalitarian principle. 
C)  the conservative principle. 
D)  none of the above.

Question 13

The less bowed the Lorenz Curve, the

Accepted Answer

A)  more equal the income distribution. 
B)  less equal the income distribution. 
C)  greater the number of low-income people. 
D)  greater the number of high-income people. 
A)  more equal the income distribution. 
B)  less equal the income distribution. 
C)  greater the number of low-income people. 
D)  greater the number of high-income people.

Question 14

The Social Security Fund is designed as

Accepted Answer

A)  a pay-as-you-go system. 
B)  an investment portfolio that individual contributors can make periodic payments into. 
C)  an account that allows periodic withdrawals by contributors. 
D)  an individual account with a federal reserve bank. 
A)  a pay-as-you-go system. 
B)  an investment portfolio that individual contributors can make periodic payments into. 
C)  an account that allows periodic withdrawals by contributors. 
D)  an individual account with a federal reserve bank.

Question 15

Which of the following statements about Social Security is FALSE?

Accepted Answer

A)  Social Security is an intergenerational transfer where the benefits paid are only roughly related to past earnings. 
B)  Over 90 percent of all employed workers in the United States are covered by Social Security. 
C)  Benefit payments under Social Security are based on the recipient's need. 
D)  Benefit payments under Social Security redistribute income from young to old. 
A)  Social Security is an intergenerational transfer where the benefits paid are only roughly related to past earnings. 
B)  Over 90 percent of all employed workers in the United States are covered by Social Security. 
C)  Benefit payments under Social Security are based on the recipient's need. 
D)  Benefit payments under Social Security redistribute income from young to old.

Question 16

Compared to a sampling of other developed nations, the U.S. income distribution is more unequal than many others. What accounts for this?

Accepted Answer

A)  The lowest-income families in the United States earn much less than the lowest-income households in other nations. 
B)  Marginal income tax rates are much higher in the United States than in any other nation. 
C)  The highest-income families in the United States earn much more than the highest-income households in other nations. 
D)  Other nations manipulate their data to look better. 
A)  The lowest-income families in the United States earn much less than the lowest-income households in other nations. 
B)  Marginal income tax rates are much higher in the United States than in any other nation. 
C)  The highest-income families in the United States earn much more than the highest-income households in other nations. 
D)  Other nations manipulate their data to look better.

Question 17

Much of a person's increased productivity can be linked to

Accepted Answer

A)  on-the-job training. 
B)  the prevalent marginal tax rate. 
C)  the price elasticity of demand for the product. 
D)  the income elasticity of demand for the product. 
A)  on-the-job training. 
B)  the prevalent marginal tax rate. 
C)  the price elasticity of demand for the product. 
D)  the income elasticity of demand for the product.

Question 18

Which of the following CANNOT be eliminated in a growing economy such as the U.S. economy?

Accepted Answer

A)  absolute poverty 
B)  relative poverty 
C)  both absolute and relative poverty 
D)  Neither absolute nor relative poverty can be eliminated. 
A)  absolute poverty 
B)  relative poverty 
C)  both absolute and relative poverty 
D)  Neither absolute nor relative poverty can be eliminated.

Question 19

The richest 10 percent of U.S. houses hold more than two-thirds of all wealth. The problem with this statement is that

Accepted Answer

A)  it does not consider an individual's current income. 
B)  it does not consider private and public pension plans. 
C)  it is based entirely on nonhuman wealth. 
D)  it is based entirely on human wealth. 
A)  it does not consider an individual's current income. 
B)  it does not consider private and public pension plans. 
C)  it is based entirely on nonhuman wealth. 
D)  it is based entirely on human wealth.

Question 20

What is the age-earnings cycle? What is the typical age-earnings profile for a U.S. resident?

Accepted Answer

The age-earnings cycle is the regular ea

Exam 30: Income, Poverty, and Health Care

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

When measuring the benefits from investing in human capital

The productivity standard for the distribution of income can be thought of as

The return on wealth is

Relative poverty

-The country reflecting perfect income equality in the above figure is

Which of the following statements is an accurate statement about the Social Security (OASDI) program?

The health care market in the United States is characterized by

-Refer to the above figure. Which of the graphs are consistent with the age-earnings profile?

The original objective of Social Security was

-Use the information in the above table. The top 40 percent of the population earn

The idea that the Lorenz curve should be along the 45 degree line is consistent with

The less bowed the Lorenz Curve, the

The Social Security Fund is designed as

Which of the following statements about Social Security is FALSE?

Compared to a sampling of other developed nations, the U.S. income distribution is more unequal than many others. What accounts for this?

Much of a person's increased productivity can be linked to

Which of the following CANNOT be eliminated in a growing economy such as the U.S. economy?

The richest 10 percent of U.S. houses hold more than two-thirds of all wealth. The problem with this statement is that

What is the age-earnings cycle? What is the typical age-earnings profile for a U.S. resident?

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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