Question 1

Foreign aid at times actually hinders economic growth by creating wrong incentives.

Accepted Answer

A) True 
 B)False

Question 2

_____ are the primary population group with poverty-level incomes in the USA.

Accepted Answer

A) Single-income households 
B) Households headed by males 
C) College graduates 
D) People who do not have high school education 
E) Retired individuals 
A) Single-income households 
B) Households headed by males 
C) College graduates 
D) People who do not have high school education 
E) Retired individuals

Question 3

The poverty threshold is often determined in terms of the expenditure on meals that meet a predetermined nutritional standard.

Accepted Answer

A) True 
 B)False

Question 4

If the guaranteed income floor for a family of four is $14, 000 and the tax rate is 50 percent, then the break-even income for this family will be $28, 000.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following refers to per capita income?

Accepted Answer

A) National income divided by number of households 
B) National income divided by number of people 
C) Number of households divided by national income 
D) Number of people divided by national income 
E) Number of people divided by domestic income 
A) National income divided by number of households 
B) National income divided by number of people 
C) Number of households divided by national income 
D) Number of people divided by national income 
E) Number of people divided by domestic income

Question 6

Which of the following is an example of in-kind transfer?

Accepted Answer

A) Social security benefits 
B) Food stamps 
C) Disability pensions 
D) Unemployment compensations 
E) Earned income tax credit 
A) Social security benefits 
B) Food stamps 
C) Disability pensions 
D) Unemployment compensations 
E) Earned income tax credit

Question 7

Even when legal title is established in the developing countries, it is often difficult to use that title because of the failure of countries to enforce people's ownership of property.

Accepted Answer

A) True 
 B)False

Question 8

Under the negative income tax program, a family will always receive some amount of transfer from the government, irrespective of its income level.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following tax structures helps in reducing income inequality?

Accepted Answer

A) Proportional tax structure 
B) Regressive tax structure 
C) Indirect tax structure 
D) Progressive tax structure 
E) A combination of proportional and regressive tax structure. 
A) Proportional tax structure 
B) Regressive tax structure 
C) Indirect tax structure 
D) Progressive tax structure 
E) A combination of proportional and regressive tax structure.

Question 10

The "Robin Hood" tax policy, which taxes the rich to give to the poor, is best described by economists as:

Accepted Answer

A) a proportional tax policy. 
B) a regressive tax policy. 
C) a poll tax policy. 
D) a progressive tax policy. 
E) a capital tax policy. 
A) a proportional tax policy. 
B) a regressive tax policy. 
C) a poll tax policy. 
D) a progressive tax policy. 
E) a capital tax policy.

Question 11

The official poverty-line income is adjusted annually for _____.

Accepted Answer

A) income taxes 
B) unemployment compensation benefits 
C) house rents 
D) inflation 
E) increases in health-care costs 
A) income taxes 
B) unemployment compensation benefits 
C) house rents 
D) inflation 
E) increases in health-care costs

Question 12

The table given below shows the annual incomes of a family of four and the corresponding transfer incomes. Table 33.3
  Refer to Table 33.3.Suppose the family's annual earnings increases from $1, 000 to $5, 000.What is the resulting reduction in income transfer?

Accepted Answer

A) $5, 000 
B) $1, 000 
C) $4, 750 
D) $3, 750 
E) $2, 000 
A) $5, 000 
B) $1, 000 
C) $4, 750 
D) $3, 750 
E) $2, 000

Question 13

The table below shows the distribution of income in the U.S.in the year 1978. Table 33.1
  If a Lorenz curve is drawn using the data in Table 33.1, it will:

Accepted Answer

A) coincide with the line of perfect equality. 
B) be a L-shaped curve. 
C) bow above the line of perfect equality. 
D) bow down below the line of perfect equality. 
E) be a rectangular shaped curve. 
A) coincide with the line of perfect equality. 
B) be a L-shaped curve. 
C) bow above the line of perfect equality. 
D) bow down below the line of perfect equality. 
E) be a rectangular shaped curve.

Question 14

Those who argue that welfare programs are a drag on the economy are of the view that welfare programs funded by taxes:

Accepted Answer

A) reduce the opportunity cost of labor. 
B) raise the incidence of poverty and income inequality. 
C) raise the incentive to work. 
D) reduce the tax-liability of the tax-payers. 
E) reduce the demand for labor. 
A) reduce the opportunity cost of labor. 
B) raise the incidence of poverty and income inequality. 
C) raise the incentive to work. 
D) reduce the tax-liability of the tax-payers. 
E) reduce the demand for labor.

Question 15

If the income floor for a family of four is $25, 000 and the negative income tax rate is 20 percent, the break-even income should be:

Accepted Answer

A) $125, 000. 
B) $250, 000. 
C) $100, 000. 
D) $200, 000. 
E) $225, 000. 
A) $125, 000. 
B) $250, 000. 
C) $100, 000. 
D) $200, 000. 
E) $225, 000.

Question 16

Supplementary Security Incomes are provided to those by the U.S.government who:

Accepted Answer

A) regularly pay a social security tax. 
B) are below 65 years of age. 
C) lack the required education to be absorbed in the job market. 
D) earn less than $4, 500 per year. 
E) are temporarily unemployed. 
A) regularly pay a social security tax. 
B) are below 65 years of age. 
C) lack the required education to be absorbed in the job market. 
D) earn less than $4, 500 per year. 
E) are temporarily unemployed.

Question 17

The size of a family or household does not affect the data used to measure income inequality.

Accepted Answer

A) True 
 B)False

Question 18

At each point on the line of income equality, the percentage of total population and the percentage of total income are equal.

Accepted Answer

A) True 
 B)False

Question 19

Measures which aim at eliminating the income disparity between the rich and the poor affect incentives to work, innovate, take risks, acquire education, and so on.

Accepted Answer

A) True 
 B)False

Question 20

A Gini of 0 implies:

Accepted Answer

A) every family has equal amount of income. 
B) top 10% of the families appropriate almost 100% of the total income. 
C) bottom 90% of the families have only 10% of the total income. 
D) bottom 20% of the families have 80% of the total income. 
E) only 1 family appropriates the entire national income. 
A) every family has equal amount of income. 
B) top 10% of the families appropriate almost 100% of the total income. 
C) bottom 90% of the families have only 10% of the total income. 
D) bottom 20% of the families have 80% of the total income. 
E) only 1 family appropriates the entire national income.

Exam 54: Income Distribution, Poverty and Government Policy

Foreign aid at times actually hinders economic growth by creating wrong incentives.

_____ are the primary population group with poverty-level incomes in the USA.

The poverty threshold is often determined in terms of the expenditure on meals that meet a predetermined nutritional standard.

If the guaranteed income floor for a family of four is $14, 000 and the tax rate is 50 percent, then the break-even income for this family will be $28, 000.

Which of the following refers to per capita income?

Which of the following is an example of in-kind transfer?

Even when legal title is established in the developing countries, it is often difficult to use that title because of the failure of countries to enforce people's ownership of property.

Under the negative income tax program, a family will always receive some amount of transfer from the government, irrespective of its income level.

Which of the following tax structures helps in reducing income inequality?

The "Robin Hood" tax policy, which taxes the rich to give to the poor, is best described by economists as:

The official poverty-line income is adjusted annually for _____.

The table given below shows the annual incomes of a family of four and the corresponding transfer incomes. Table 33.3 Refer to Table 33.3.Suppose the family's annual earnings increases from $1, 000 to $5, 000.What is the resulting reduction in income transfer?

The table below shows the distribution of income in the U.S.in the year 1978. Table 33.1 If a Lorenz curve is drawn using the data in Table 33.1, it will:

Those who argue that welfare programs are a drag on the economy are of the view that welfare programs funded by taxes:

If the income floor for a family of four is $25, 000 and the negative income tax rate is 20 percent, the break-even income should be:

Supplementary Security Incomes are provided to those by the U.S.government who:

The size of a family or household does not affect the data used to measure income inequality.

At each point on the line of income equality, the percentage of total population and the percentage of total income are equal.

Measures which aim at eliminating the income disparity between the rich and the poor affect incentives to work, innovate, take risks, acquire education, and so on.

A Gini of 0 implies:

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

Development Economics

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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