Question 1

The greater the negative income tax imposed on a family, greater is the family's incentive to earn more.

Accepted Answer

A) True 
 B)False

Question 2

Taxes are one method of funding the poverty alleviation programs by the government.Which of the following is an important impact of taxes?

Accepted Answer

A) Taxes increase workers' incentives to work for longer hours. 
B) Taxes raise the disposable income of the workers. 
C) Imposition of taxes make the government popular among the people. 
D) Taxes reduce the opportunity cost of leisure. 
E) Taxes reduce the demand for labor. 
A) Taxes increase workers' incentives to work for longer hours. 
B) Taxes raise the disposable income of the workers. 
C) Imposition of taxes make the government popular among the people. 
D) Taxes reduce the opportunity cost of leisure. 
E) Taxes reduce the demand for labor.

Question 3

The table given below shows the absolute tax amounts under five different tax policies for respective income levels. Table 19.2
  Refer to Table 19.2.Which of the tax policies is an example of a proportional tax?

Accepted Answer

A) Alpha 
B) Gamma 
C) Eta 
D) Beta 
E) Delta 
A) Alpha 
B) Gamma 
C) Eta 
D) Beta 
E) Delta

Question 4

If the Gini co-efficient for any economy is 0.85, which of the following statements is true?

Accepted Answer

A) The national income of this economy is more or less equally distributed. 
B) The Lorenz curve for the economy will bow above the line of perfect equality. 
C) The Lorenz curve for the economy will coincide with the line of perfect equality. 
D) The Lorenz curve for the economy will bow down below the line of perfect equality. 
E) The Lorenz curve for the economy will be a rectangle. 
A) The national income of this economy is more or less equally distributed. 
B) The Lorenz curve for the economy will bow above the line of perfect equality. 
C) The Lorenz curve for the economy will coincide with the line of perfect equality. 
D) The Lorenz curve for the economy will bow down below the line of perfect equality. 
E) The Lorenz curve for the economy will be a rectangle.

Question 5

If the negative income tax rate is 25 percent and the break-even income of a family of four is $50, 000, the guaranteed income floor is:

Accepted Answer

A) $10, 000. 
B) $15, 000. 
C) $10, 500. 
D) $12, 500. 
E) $15, 500. 
A) $10, 000. 
B) $15, 000. 
C) $10, 500. 
D) $12, 500. 
E) $15, 500.

Question 6

At the break-even income level:

Accepted Answer

A) the tax levied on an individual is equal to zero. 
B) the transfer income received by an individual is equal to zero. 
C) the tax taken from an individual is greater than the transfer income received by him. 
D) the tax taken from an individual is equal to the transfer income received by him. 
E) the tax taken from an individual is less than the transfer income received by him. 
A) the tax levied on an individual is equal to zero. 
B) the transfer income received by an individual is equal to zero. 
C) the tax taken from an individual is greater than the transfer income received by him. 
D) the tax taken from an individual is equal to the transfer income received by him. 
E) the tax taken from an individual is less than the transfer income received by him.

Question 7

Someone who has the desire to work but has no exceptional abilities and has not acquired the skills necessary for a well-paying job is likely to escape poverty completely.

Accepted Answer

A) True 
 B)False

Question 8

The diagram that represents how income is distributed among members of a population is known as a(n):

Accepted Answer

A) Indifference curve. 
B) Laffer curve. 
C) Edgeworth box. 
D) Lorenz curve. 
E) Phillips curve 
A) Indifference curve. 
B) Laffer curve. 
C) Edgeworth box. 
D) Lorenz curve. 
E) Phillips curve

Question 9

Which of the following statements concerning income distribution among nations is true?

Accepted Answer

A) A country with unequal distribution of income has a high standard of living. 
B) The richest countries have only 10 percent of the world's population but receive 80 percent of total world income. 
C) The distribution of total world income among nations is equal. 
D) One-quarter of the world's population lives in the developing countries. 
E) Per capita income between countries is generally the same. 
A) A country with unequal distribution of income has a high standard of living. 
B) The richest countries have only 10 percent of the world's population but receive 80 percent of total world income. 
C) The distribution of total world income among nations is equal. 
D) One-quarter of the world's population lives in the developing countries. 
E) Per capita income between countries is generally the same.

Question 10

The greater the value of the Gini co-efficient:

Accepted Answer

A) the greater will be the GDP of the economy. 
B) the greater will be the income inequality. 
C) the greater will be the revenue of the government from direct taxes. 
D) the greater will be the equality in the distribution of income and wealth. 
E) the lesser will be the expenditure on the part of the government. 
A) the greater will be the GDP of the economy. 
B) the greater will be the income inequality. 
C) the greater will be the revenue of the government from direct taxes. 
D) the greater will be the equality in the distribution of income and wealth. 
E) the lesser will be the expenditure on the part of the government.

Question 11

In a progressive tax structure:

Accepted Answer

A) both the tax rate and absolute tax amount increases with increase in income. 
B) the tax rate remains constant, but the absolute tax amount increases with increase in income. 
C) both the tax rate and absolute tax amount declines with increase in income. 
D) the tax rate falls, but the absolute tax amount increases with increase in income. 
E) the tax rate increases, but the absolute tax amount decreases with increase in income. 
A) both the tax rate and absolute tax amount increases with increase in income. 
B) the tax rate remains constant, but the absolute tax amount increases with increase in income. 
C) both the tax rate and absolute tax amount declines with increase in income. 
D) the tax rate falls, but the absolute tax amount increases with increase in income. 
E) the tax rate increases, but the absolute tax amount decreases with increase in income.

Question 12

For people who are too well off to receive welfare benefits but who would become eligible for negative income tax payments, the negative income tax might create work disincentives.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

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 16

The guaranteed transfer income of Angela's family, which consists of her parents and her sister, is $15, 000.This implies, if the family earns nothing it will receive a transfer of $15, 000.If a negative tax rate of 50 percent is levied, the family's break-even income is:

Accepted Answer

A) $20, 000. 
B) $22, 500. 
C) $7, 500. 
D) $15, 000. 
E) $30, 000. 
A) $20, 000. 
B) $22, 500. 
C) $7, 500. 
D) $15, 000. 
E) $30, 000.

Question 17

Unemployment insurance programs provide benefits to permanently unemployed people.

Accepted Answer

A) True 
 B)False

Question 18

If the negative income tax rate is less than 100 percent, the break-even income level will be lower than the poverty level, and families who are officially considered poor will not receive the benefits.

Accepted Answer

A) True 
 B)False

Question 19

The table below shows the monthly income of a family and the fuel assistance received from the government. Table 19.4
  Refer to Table 19.4.The greatest disincentive to work for this family occurs between the income levels of _____ and _____.

Accepted Answer

A) $0;$100 
B) $100;$200 
C) $400;$500 
D) $200;$300 
E) $300;$400 
A) $0;$100 
B) $100;$200 
C) $400;$500 
D) $200;$300 
E) $300;$400

Question 20

The income variation across the countries is the result of differential rates of economic growth being experienced by them.

Accepted Answer

A) True 
 B)False

Exam 34: Income Distribution, Poverty and Government Policy

The greater the negative income tax imposed on a family, greater is the family's incentive to earn more.

Taxes are one method of funding the poverty alleviation programs by the government.Which of the following is an important impact of taxes?

The table given below shows the absolute tax amounts under five different tax policies for respective income levels. Table 19.2 Refer to Table 19.2.Which of the tax policies is an example of a proportional tax?

If the Gini co-efficient for any economy is 0.85, which of the following statements is true?

If the negative income tax rate is 25 percent and the break-even income of a family of four is $50, 000, the guaranteed income floor is:

At the break-even income level:

Someone who has the desire to work but has no exceptional abilities and has not acquired the skills necessary for a well-paying job is likely to escape poverty completely.

The diagram that represents how income is distributed among members of a population is known as a(n):

Which of the following statements concerning income distribution among nations is true?

The greater the value of the Gini co-efficient:

In a progressive tax structure:

For people who are too well off to receive welfare benefits but who would become eligible for negative income tax payments, the negative income tax might create work disincentives.

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.

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

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.

The guaranteed transfer income of Angela's family, which consists of her parents and her sister, is $15, 000.This implies, if the family earns nothing it will receive a transfer of $15, 000.If a negative tax rate of 50 percent is levied, the family's break-even income is:

Unemployment insurance programs provide benefits to permanently unemployed people.

If the negative income tax rate is less than 100 percent, the break-even income level will be lower than the poverty level, and families who are officially considered poor will not receive the benefits.

The table below shows the monthly income of a family and the fuel assistance received from the government. Table 19.4 Refer to Table 19.4.The greatest disincentive to work for this family occurs between the income levels of _____ and _____.

The income variation across the countries is the result of differential rates of economic growth being experienced by them.

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

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

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

The table below shows the monthly income of a family and the fuel assistance received from the government. Table 19.4 Refer to Table 19.4.The greatest disincentive to work for this family occurs between the income levels of _ and _.