Exam 34: Income Distribution, Poverty and Government Policy

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

Why does the census data overstate inequality?

A negative income tax implies that:

For the negative income tax to eradicate poverty:

If everyone had the same income, then the Lorenz curve would:

Suppose all families of four, who earn nothing, are guaranteed a transfer payment of $20, 000 and the government levies a negative tax rate of 20 percent.Calculate the income level below which all such families will receive some income benefits.

Which of the following is an absolute measure of poverty?

Experiences of Russia and China prove that, greater the governmental intervention in the market, more equal will be the income distribution in the economy.

If everyone in an economy had equal income, the Lorenz curve would be a curve that intersects the line of income equality at the point at which 50 percent of the population earns 50 percent of the income.

The welfare programs undertaken by the U.S.government has been universally successful in reducing poverty and fostering economic growth.

Government policies designed to change the distribution of income to one that is more equal involve taking from the rich and giving to the poor.

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

The world Lorenz curve coincides with the line of income equality because the average income of the different countries are more or less equal.

If an individual who earns $20, 000 pays $2, 000 in taxes and another individual who earns $100, 000 pays $10, 000 in taxes, then these individuals are being taxed under a _______ tax system.

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

Assume that any given percentage of the population earns an equal percentage of real GDP.This percentage of population will be represented by:

A proportional tax is a tax whose rate increases as the tax base widens.

Gini co-efficient is the:

If those who are poor at any one time are poor only temporarily, then their plight is only temporary.This statement is based on which of the following assumptions?

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.