Exam 20: Income Inequality and Poverty

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. If the poverty rate in Imagination is 25%, in what income range on the table is the poverty line?

Critics argue that a disadvantage of the Earned Income Tax Credit is that it does not effectively target the working poor because many recipients are the teenage children of middle-income families.

The poverty line is

Suppose the average value of in-kind transfers increases by $2,000 from 2013 to 2014. The poverty rate

Which of the following statements about the minimum wage is correct?

When incentives to earn income are distorted by income redistribution programs,

The United States has more income inequality than Japan, Germany, and France.

When comparing the percentage of income (or expenditure) of the lowest and highest 10 percent of the population,

The measured poverty rate may not reflect the true extent of economic deprivation because it does not include some forms of government assistance.

Figure 20-3 -Refer to Figure 20-3. In 2011, the percent of children under age 18 in poverty is

Which of the following is not correct?

There is very little economic mobility in the United States, which means that once a family is poor, it is very likely to remain poor for at least a decade.

The invisible hand of the marketplace acts to allocate resources

The maximin criterion is attributed to which political philosophy?

An income distribution may not give an accurate picture of the standard of living for the poor because it does not include in-kind transfers.

The distribution of income for Dismal is as follows: Number of Families Income 1,000 less than $10,000 2,000 between $10,000 and $20,000 2,000 between $20,000 and $30,000 800 between $30,000 and $40,000 200 over $40,000 If the poverty rate in Dismal is about 17 percent, what is the poverty line in Dismal?

A utilitarian government will pursue policies that redistribute income from the rich to the poor. One problem with these policies is that

Table 20-8 Source: U.S. Bureau of Census -Refer to Table 20-8. Comparing data from 2000 and 2011, which of the following statements is correct?

The study by economists Cox and Alm found that the 2006 after-tax income of the richest fifth of U.S. households is