Exam 20: Income Inequality and Poverty

A disadvantage of the Earned Income Tax Credit (EITC) program is that it does not help alleviate poverty due to unemployment, sickness, or other inability to work.

Scenario 20-5 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/4 of income) - $10,000 -Refer to Scenario 20-5. A family earning $110,000 before taxes would have how much after-tax income?

Whether or not policymakers should try to make our society more egalitarian is largely a matter of

Table 20-10 *A Gini coefficient is a commonly used measure of income inequality, with values between 0 and 1 (0 corresponds to perfect equality whereby everyone has exactly the same income, and 1 corresponds to perfect inequality where one person has all the income, while everyone else has zero income). Source: The World Bank -Refer to Table 20-10. Which country has the most equal income distribution?

The regular pattern of income variation over a person's life is called the

The maximin criterion for government policies is associated with

Table 20-5 Distribution of Income in Umakastan -Refer to Table 20-5. Where would the government of Umakastan have to set the poverty line to have a poverty rate of about 28%?

Utilitarianism is

In the Temporary Assistance for Needy Families program, most families

Economic mobility in the United States is

Which of the following does not explain why data on income distribution and the poverty rate give an incomplete picture of inequality?

Which of the following will not occur when government policies are enacted to make the distribution of income more equitable?

The only qualification to receive government assistance under a negative income tax is

The economic life cycle describes how young people usually have higher savings rates than middle-aged people.

Saving and borrowing is indicative of a family that

In 2011 the top 5 percent of income earners accounted for over 50% of all income received by United States' families.

People have their highest saving rates when they are

The typical economic life cycle illustrates how people tend to

A common criticism of government programs that are designed to assist the poor is that

When considering a person's standard of living, data on the income distribution and the poverty rate may provide an incomplete picture because the poor may