Question 1

When designing public policies,which income group would philosopher John Rawls argue needs the most attention?

Accepted Answer

A)   Individuals located in the bottom fifth of the income distribution.
B)   Individuals located at the average income level.
C)   Individuals located in the top fifth of the income distribution.
D)   Individuals located in the top five percent of the income distribution.E) None of the above
F) A) and B)

Question 2

Suppose that young people often borrow and then repay the loans when they are older.These actions relate to which problem in measuring inequality?

Accepted Answer

A)   in-kind transfers
B)   the economic life cycle
C)   a negative income tax
D)   economic mobilityE) A) and D)
F) B) and C)

Question 3

An example of a transitory change in income is the

Accepted Answer

A)   annual cost of living adjustment to your salary.
B)   increase in income that results from a job promotion linked to your education.
C)   increase in income of California orange growers that results from an orange-killing frost in Florida.
D)   All of the above are correct.E) B) and C)
F) C) and D)

Question 4

The poverty line in the country of Grim is $10,000.The distribution of income for Grim is as follows:  The poverty rate in Grim is

Accepted Answer

A)   5 percent.
B)   16.7 percent.
C)   50 percent.
D)   83.3 percent.E) A) and C)
F) All of the above

Question 5

In the U.S.economy,labor earnings make up about

Accepted Answer

A)   one-half of total income.
B)   two-thirds of total income.
C)   three-fourths of total income.
D)   nine-tenths of total income.E) B) and C)
F) All of the above

Question 6

If greater equality is the benefit of government intervention into the allocation of society's resources,what is the cost?

Accepted Answer

The answer of If greater equality is the benefit of...

Question 7

In 2008,what percentage of U.S.families had income levels below $113,205?

Accepted Answer

A)   5 percent
B)   20 percent
C)   80 percent
D)   95 percentE) All of the above
F) B) and D)

Question 8

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

Accepted Answer

A)   An increase in the minimum wage enhances the well-being of all unskilled workers.
B)   An increase in the minimum wage has no effect on the well-being of middle-class families.
C)   Advocates of the minimum wage argue that the demand for labor is relatively inelastic.
D)   Critics of the minimum wage argue that it is an undesirable way of helping the poor because it is costly to the government.E) None of the above
F) B) and C)

Question 9

The poverty line in the country of Inequalia is $7,800.The distribution of income for Inequalia is as follows:  The poverty rate in Inequalia is

Accepted Answer

A)   7.8 percent.
B)   between 10 percent and 25 percent.
C)   between 25 percent and 50 percent.
D)   39 percent.E) B) and C)
F) C) and D)

Question 10

Table 20-9
Poverty Thresholds in 2002,by Size of Family and Number of Related Children Under 18 Years
[Dollars]
  Source: U.S.Bureau of the Census,Current Population Survey.
-Refer to Table 20-9.What is the poverty line for a family with one 35-year-old adult and one child?

Accepted Answer

A)   $8,628
B)   $9,359
C)   $12,353
D)   $12,400E) B) and C)
F) A) and D)

Question 11

A family's ability to buy goods and services depends largely on its

Accepted Answer

A)   permanent income,which is its normal,or average,income.
B)   permanent income,which is the lowest annual income the family has received over a 10-year period.
C)   transitory income,which is the measure of income used by the government to analyze the distribution of income and the poverty rate.
D)   transitory income,which is its money income plus any in-kind transfers it receives.E) None of the above
F) A) and B)

Question 12

Despite continued growth in average income since the early 1970s,the poverty rate has not declined below the level reached in 1973.

Accepted Answer

A) True 
 B)False

Question 13

Table 20-8
  Source: U.S.Bureau of Census
-Refer to Table 20-8.Comparing data from 2000 and 2008,which of the following statements is correct?

Accepted Answer

A)   There has been no change in overall income inequality because the share of income held by the middle fifth is identical.
B)   Overall income inequality has worsened slightly,as shown by the simultaneous increase the share of income held by the top fifth and the decrease in the share of income held by the bottom fifth.
C)   Overall income inequality has improved because the share held by the middle fifth has declined by almost 1%.
D)   None of the above is correct.E) C) and D)
F) All of the above

Question 14

In 2008,the poverty rate in the United States was 13.2 percent.This means that 13.2 percent

Accepted Answer

A)   of the population had a total family income that fell below the poverty line.
B)   of the population had a total family income that was above the poverty line.
C)   of the population had a total family income below $10,000.
D)   of the population had a total family income above $50,000.E) A) and B)
F) None of the above

Question 15

The percentage of families with incomes below the poverty line

Accepted Answer

A)   is defined as the 10 percent of U.S.households with the lowest incomes.
B)   is known as the poverty rate.
C)   is known as the unemployment rate.
D)   rises as the general income level rises.E) C) and D)
F) None of the above

Question 16

Libertarianism identifies a redistribution of income role for government when

Accepted Answer

A)   individual incomes vary widely.
B)   the income distribution is altered by illegal means (e.g.theft) .
C)   a social planner is needed to smooth out the transitory income stream.
D)   workers lose their jobs as a result of structural changes in the economy.E) A) and B)
F) B) and C)

Question 17

The United States has relatively greater income

Accepted Answer

A)   inequality than developing countries but greater equality than other developed countries.
B)   inequality than both developing and other developed countries.
C)   equality than developing countries but greater inequality than other developed countries.
D)   equality than both developing and other developed countries.E) A) and B)
F) None of the above

Question 18

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Accepted Answer

A) True 
 B)False

Question 19

Table 20-5
  *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 20-5.Which country has the most equal income distribution?

Accepted Answer

A)   Latvia
B)   Italy
C)   France
D)   SwedenE) B) and C)
F) A) and B)

Question 20

One existing government program that works much like a negative income tax is Medicaid.

Accepted Answer

A) True 
 B)False

Exam 20: Income Inequality and Poverty

An example of a transitory change in income is the

Correct Answer
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A family's ability to buy goods and services depends largely on its

Correct Answer
verified

Table 20-8 Source: U.S.Bureau of Census -Refer to Table 20-8.Comparing data from 2000 and 2008,which of the following statements is correct?

Correct Answer
verified

Libertarianism identifies a redistribution of income role for government when

Correct Answer
verified

Correct Answer
verified

In 2008,the poverty rate in the United States was 13.2 percent.This means that 13.2 percent

Correct Answer
verified

The poverty line in the country of Inequalia is $7,800.The distribution of income for Inequalia is as follows: The poverty rate in Inequalia is

Correct Answer
verified

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

Correct Answer
verified

In 2008,what percentage of U.S.families had income levels below $113,205?

Correct Answer
verified

Table 20-9 Poverty Thresholds in 2002,by Size of Family and Number of Related Children Under 18 Years [Dollars] Source: U.S.Bureau of the Census,Current Population Survey. -Refer to Table 20-9.What is the poverty line for a family with one 35-year-old adult and one child?

Correct Answer
verified

Despite continued growth in average income since the early 1970s,the poverty rate has not declined below the level reached in 1973.

Correct Answer
verified

One existing government program that works much like a negative income tax is Medicaid.

Correct Answer
verified

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Correct Answer
verified

The poverty line in the country of Grim is $10,000.The distribution of income for Grim is as follows: The poverty rate in Grim is

Correct Answer
verified

In the U.S.economy,labor earnings make up about

Correct Answer
verified

The percentage of families with incomes below the poverty line

Correct Answer
verified

If greater equality is the benefit of government intervention into the allocation of society's resources,what is the cost?

Correct Answer
verified

When designing public policies,which income group would philosopher John Rawls argue needs the most attention?

Correct Answer
verified

The United States has relatively greater income

Correct Answer
verified

Suppose that young people often borrow and then repay the loans when they are older.These actions relate to which problem in measuring inequality?

Correct Answer
verified

Exam 20: Income Inequality and Poverty

An example of a transitory change in income is the

Correct AnswerverifiedShow Answer

A family's ability to buy goods and services depends largely on its

Correct AnswerverifiedShow Answer

Table 20-8 Source: U.S.Bureau of Census -Refer to Table 20-8.Comparing data from 2000 and 2008,which of the following statements is correct?

Correct AnswerverifiedShow Answer

Libertarianism identifies a redistribution of income role for government when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In 2008,the poverty rate in the United States was 13.2 percent.This means that 13.2 percent

Correct AnswerverifiedShow Answer

The poverty line in the country of Inequalia is $7,800.The distribution of income for Inequalia is as follows: The poverty rate in Inequalia is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In 2008,what percentage of U.S.families had income levels below $113,205?

Correct AnswerverifiedShow Answer

Table 20-9 Poverty Thresholds in 2002,by Size of Family and Number of Related Children Under 18 Years [Dollars] Source: U.S.Bureau of the Census,Current Population Survey. -Refer to Table 20-9.What is the poverty line for a family with one 35-year-old adult and one child?

Correct AnswerverifiedShow Answer

Despite continued growth in average income since the early 1970s,the poverty rate has not declined below the level reached in 1973.

Correct AnswerverifiedShow Answer

One existing government program that works much like a negative income tax is Medicaid.

Correct AnswerverifiedShow Answer

Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone in society.

Correct AnswerverifiedShow Answer

The poverty line in the country of Grim is $10,000.The distribution of income for Grim is as follows: The poverty rate in Grim is

Correct AnswerverifiedShow Answer

In the U.S.economy,labor earnings make up about

Correct AnswerverifiedShow Answer

The percentage of families with incomes below the poverty line

Correct AnswerverifiedShow Answer

If greater equality is the benefit of government intervention into the allocation of society's resources,what is the cost?

Correct AnswerverifiedShow Answer

When designing public policies,which income group would philosopher John Rawls argue needs the most attention?

Correct AnswerverifiedShow Answer

The United States has relatively greater income

Correct AnswerverifiedShow Answer

Suppose that young people often borrow and then repay the loans when they are older.These actions relate to which problem in measuring inequality?

Correct AnswerverifiedShow Answer

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