Question 1

A reduction in the redistribution of income

Accepted Answer

A) lowers the poverty rate for people. 
B) raises people's standard of living. 
C) results in more income inequality. 
D) results in less income inequality.

Question 2

The equality-efficiency trade-off refers to

Accepted Answer

A) the conflict between risk averters and risk takers. 
B) the willingness of Congress to abandon existing welfare programs in favor of a comprehensive plan to increase education and training for low-income persons. 
C) possible conflicts between the goals of economic efficiency and greater income equality. 
D) the difference between the goals of income equality and equality of economic opportunity.

Question 3

The unequal distribution of wealth among households in the United States is one of the causes of income inequality.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is correct?

Accepted Answer

A) The Social Security Act requires all employers to insure their workers against industrial accidents and diseases. 
B) An increase in the degree of income inequality means that the income level of the poor is falling while the income level of the rich is rising. 
C) Over 90 percent of the workers in the United States are currently covered by Social Security. 
D) About one-fifth of our population is now classified as living in poverty.

Question 5

In 2010, the top 1 percent of households in the U.S.owned about what percentage of total wealth in the nation?

Accepted Answer

A) 20 
B) 10 
C) 35 
D) 50

Question 6

The Temporary Assistance for Needy Families (TANF) program

Accepted Answer

A) put a limit on receiving welfare payments and required able-bodied adults to work after receiving assistance for two years. 
B) increased the number of people receiving welfare benefits and the amount of the assistance. 
C) required businesses to monitor low-income workers and used federal funds to supplement their pay. 
D) required the use of food stamps for food purchases by families but permitted cash assistance to be given to the elderly.

Question 7

Social Security is financed

Accepted Answer

A) by state income tax revenues. 
B) by payroll taxes on employees and employers. 
C) by federal excise taxes. 
D) out of general tax revenues.

Question 8

Which of the following helps finance the medical expenses of individuals receiving TANF or SSI?

Accepted Answer

A) Medicare 
B) Supplemental Security Income (SSI) 
C) Medicaid 
D) Social Security

Question 9

A so-called welfare cliff occurs when

Accepted Answer

A) the number of welfare-payment recipients steeply declines. 
B) a welfare-payment recipientâ€™s overall income falls if they earn more from work. 
C) the government runs out of funds and begins cutting social programs, including welfare payments. 
D) a low-income householdâ€™s application for welfare payments gets bogged down in the bureaucracy.

Question 10

Which of the following is a cause of growing income inequality in the United States since 1975?

Accepted Answer

A) exporting to other countries by major U.S.industries 
B) industrial restructuring from services to goods production 
C) a widening wage gap between skilled and unskilled workers 
D) an increase in the progressivity of the federal tax system

Question 11

According to the standard government definitions, the percentage of the U.S.population now (2014) considered to be living in poverty is about

Accepted Answer

A) 14.8 percent. 
B) 23.6 percent. 
C) 13.1 percent. 
D) 46.7 percent.

Question 12

Government transfer programs result in a U.S.Lorenz curve that is closer to the diagonal line than would be the case without the programs.

Accepted Answer

A) True 
 B)False

Question 13

If there is a widespread bias against African-American workers, an increase in the collective discrimination coefficients of employers will

Accepted Answer

A) reduce the African-American wage rate, increase African-American employment, and lower the actual African-American-white wage ratio. 
B) reduce the African-American wage rate, decrease African-American employment, and lower the actual African-American-white wage ratio. 
C) increase the African-American wage rate, increase African-American employment, and increase the actual African-American-white wage ratio. 
D) increase the African-American wage rate, reduce African-American employment, and increase the actual African-American-white wage ratio.

Question 14

Statistical discrimination

Accepted Answer

A) is malicious. 
B) is profitable but not malicious. 
C) cannot persist because of competition. 
D) explains all occupational discrimination.

Question 15

Since 1975 the distribution of income has

Accepted Answer

A) remained virtually constant from year to year. 
B) become more equal. 
C) varied considerably from year to year but in general has been stable. 
D) become less equal.

Question 16

TANF stands for Temporary Assistance for Needy Families.

Accepted Answer

A) True 
 B)False

Question 17

The Gini ratio

Accepted Answer

A) measures the relative extent of poverty in a nation. 
B) compares the income of persons, households, or households at the 90th percentile of the income distribution to the income at the 10th percentile. 
C) is a numerical measure of the overall dispersion of income in a nation. 
D) is found by dividing the entire area below and to the right of the diagonal in the Lorenz diagram by the area between the diagonal and Lorenz curve.

Question 18

Gomez argues that we need to increase the nation's output.Chang contends that our top priority should be a more equal distribution of income and output.It can be correctly stated that these two goals are

Accepted Answer

A) essentially unrelated. 
B) complementary because the realization of one will promote fulfillment of the other. 
C) at least partially competing because the redistribution of income might impair incentives to work and produce. 
D) complementary because a more equal distribution of income always promotes economic growth.

Question 19

Being "underwater" in one's home mortgage means that the market value of one's house has fallen below

Accepted Answer

A) its value the previous year. 
B) what is owed in the mortgage loan. 
C) the purchase price. 
D) the average home price in the neighborhood.

Question 20

All social insurance programs are welfare or public charity programs.

Accepted Answer

A) True 
 B)False

Exam 23: Income Inequality, Poverty, and Discrimination

A reduction in the redistribution of income

The equality-efficiency trade-off refers to

The unequal distribution of wealth among households in the United States is one of the causes of income inequality.

Which of the following statements is correct?

In 2010, the top 1 percent of households in the U.S.owned about what percentage of total wealth in the nation?

The Temporary Assistance for Needy Families (TANF) program

Social Security is financed

Which of the following helps finance the medical expenses of individuals receiving TANF or SSI?

A so-called welfare cliff occurs when

Which of the following is a cause of growing income inequality in the United States since 1975?

According to the standard government definitions, the percentage of the U.S.population now (2014) considered to be living in poverty is about

Government transfer programs result in a U.S.Lorenz curve that is closer to the diagonal line than would be the case without the programs.

If there is a widespread bias against African-American workers, an increase in the collective discrimination coefficients of employers will

Statistical discrimination

Since 1975 the distribution of income has

TANF stands for Temporary Assistance for Needy Families.

The Gini ratio

Gomez argues that we need to increase the nation's output.Chang contends that our top priority should be a more equal distribution of income and output.It can be correctly stated that these two goals are

Being "underwater" in one's home mortgage means that the market value of one's house has fallen below

All social insurance programs are welfare or public charity programs.