Question 1

Figure 20-2
Poverty Rates by Age
 
-Refer to Figure 20-2.In 1968,the percent of elderly aged 65 and over in poverty is

Accepted Answer

A)  higher than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty.
B)  higher than the percentage of adults aged 18 to 64 but is lower than the percentage of children under age 18 in poverty.
C)  lower than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty.
D)  is lower than the percentage of adults aged 18 to 64 but is higher than the percentage of children under age 18 in poverty.E) All of the above
F) A) and C)

Question 2

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

Accepted Answer

A)  pre-school children.
B)  to be enrolled in job training.
C)  a working head-of-household.
D)  a low income.E) A) and D)
F) A) and C)

Question 3

U.S.income data over the last sixty years suggests that the distribution of income

Accepted Answer

A)  has gradually become more equal over the entire time period.
B)  has gradually become less equal over the entire time period.
C)  gradually became less equal until about 1970, then became more equal from 1970 to 2003.
D)  gradually became more equal until about 1970, then became less equal from 1970 to 2003.E) A) and C)
F) B) and C)

Question 4

Suppose that Family A borrows money when its roof leaks.Suppose that Family B saves money when it wins $500 in a state lottery.Which of the following is correct?

Accepted Answer

A)  Both Family A and Family B's spending habits suggest that they base their purchasing decisions on transitory income.
B)  Family A's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income.Family B's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income.
C)  Family A's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income.Family B's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income.
D)  Both Family A and Family B's spending habits suggest that they base their purchasing decisions on permanent income.E) A) and B)
F) B) and C)

Question 5

Which of the following statements is correct?

Accepted Answer

A)  Less than three percent of families are categorized as poor for eight years or more.
B)  In the United States, the grandson of a millionaire is much more likely to be rich than the grandson of an average-income person.
C)  The majority of millionaires in the United States inherited their wealth.
D)  Most workers have about the same income (adjusted for inflation)  when they are young as when they are middle-aged.E) None of the above
F) A) and B)

Question 6

Which of the following statements is correct?

Accepted Answer

A)  Followers of the liberalism political philosophy believe that society should maximize the total of individual utilities.
B)  The poverty line is adjusted for regional differences in the costs of raising children.
C)  One advantage to the Earned Income Tax Credit (EIT
C)   is that it benefits the working poor.
D)  When family incomes rise in poor countries, young children are more likely to be taken out of school to work on family farms.E) A) and B)
F) None of the above

Question 7

Critics of the minimum wage argue that

Accepted Answer

A)  labor demand is inelastic so firms can adjust production.
B)  too many older employees benefit at the expense of teenage workers.
C)  many minimum-wage earners are teenagers from middle-class families.
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 8

Outline the possible work disincentives created by anti-poverty programs.Is there a way to solve this problem without causing other forms of inefficiency to arise? Explain your answer.

Accepted Answer

A high marginal tax rate exists on welfa...

Question 9

According to libertarians,the government should redistribute income from rich individuals to poor individuals to achieve a more equal distribution of income.

Accepted Answer

A) True 
 B)False

Question 10

When we compare the income distribution of the United States to those of other countries,we find that the U.S.

Accepted Answer

A)  has one of the most unequal income distributions.
B)  has one of the most equal income distributions.
C)  ranks in the middle of the group.
D)  is second to China as the most unequal distribution.E) All of the above
F) B) and C)

Question 11

The poverty line calculation includes adjustments for

Accepted Answer

A)  transportation costs.
B)  child care costs.
C)  the level of prices.
D)  the Earned Income Tax Credit.E) B) and C)
F) A) and D)

Question 12

Figure 20-2
Poverty Rates by Age
 
-Refer to Figure 20-2.In 2001,the percent of elderly aged 65 and over in poverty is

Accepted Answer

A)  higher than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty.
B)  higher than the percentage of adults aged 18 to 64 but is lower than the percentage of children under age 18 in poverty.
C)  lower than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty.
D)  lower than the percentage of children under age 18 but is equal to the percentage of adults aged 18 to 64 in poverty.E) All of the above
F) C) and D)

Question 13

Figure 20-2
Poverty Rates by Age
 
-Refer to Figure 20-2.In 1968,the percent of adults aged 18 to 64 years in poverty is

Accepted Answer

A)  higher than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty.
B)  higher than the percentage of children under age 18 but is lower than the percentage of elderly aged 65 and over in poverty.
C)  is lower than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty.
D)  is lower than the percentage of children under age 18 but is higher than the percentage of elderly aged 65 and over in poverty.E) A) and C)
F) A) and B)

Question 14

Which of the following individuals would be statistically most likely to be poor?

Accepted Answer

A)  an elderly black woman
B)  an white child living with married parents
C)  a Hispanic child living with married parents
D)  a black child living with his mother in a female-headed householdE) A) and B)
F) A) and C)

Question 15

Labor earnings make up what part of total income in the U.S.economy?

Accepted Answer

A)  all of it
B)  three-fourths
C)  one-half
D)  one-fourthE) A) and B)
F) All of the above

Question 16

According to utilitarians,the ultimate objective of public actions should be to

Accepted Answer

A)  enhance the income of the rich.
B)  ensure an egalitarian distribution of income.
C)  maximize the sum of individual utility.
D)  provide for the betterment of the poor.E) C) and D)
F) A) and D)

Question 17

The utilitarian justification for redistributing income is based on the assumption of diminishing marginal utility.

Accepted Answer

A) True 
 B)False

Question 18

"Equality of opportunities is more important than equality of incomes." This statement would be most likely attributed to which political philosophy?

Accepted Answer

A)  utilitarianism
B)  liberalism
C)  libertarianism
D)  None of the above is correct.E) All of the above
F) A) and B)

Question 19

A tax provision that works much like a negative income tax is the

Accepted Answer

A)  Earned Income Tax Credit (EIT
C)  .
B)  Temporary Assistance for Needy Families (TANF) .
C)  deduction for charitable contributions.
D)  mortgage interest rate deduction.E) A) and B)
F) A) and C)

Question 20

Free trade and economic growth have reduced poverty worldwide.

Accepted Answer

A) True 
 B)False

Exam 20: Income Inequality and Poverty

Which of the following statements is correct?

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Figure 20-2 Poverty Rates by Age -Refer to Figure 20-2.In 2001,the percent of elderly aged 65 and over in poverty is

Correct AnswerverifiedShow Answer

According to libertarians,the government should redistribute income from rich individuals to poor individuals to achieve a more equal distribution of income.

Correct AnswerverifiedShow Answer

Free trade and economic growth have reduced poverty worldwide.

Correct AnswerverifiedShow Answer

The utilitarian justification for redistributing income is based on the assumption of diminishing marginal utility.

Correct AnswerverifiedShow Answer

"Equality of opportunities is more important than equality of incomes." This statement would be most likely attributed to which political philosophy?

Correct AnswerverifiedShow Answer

Figure 20-2 Poverty Rates by Age -Refer to Figure 20-2.In 1968,the percent of elderly aged 65 and over in poverty is

Correct AnswerverifiedShow Answer

The poverty line calculation includes adjustments for

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

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

Correct AnswerverifiedShow Answer

Critics of the minimum wage argue that

Correct AnswerverifiedShow Answer

Which of the following individuals would be statistically most likely to be poor?

Correct AnswerverifiedShow Answer

When we compare the income distribution of the United States to those of other countries,we find that the U.S.

Correct AnswerverifiedShow Answer

Outline the possible work disincentives created by anti-poverty programs.Is there a way to solve this problem without causing other forms of inefficiency to arise? Explain your answer.

Correct AnswerverifiedA high marginal tax rate exists on welfa...View AnswerShow Answer

A tax provision that works much like a negative income tax is the

Correct AnswerverifiedShow Answer

U.S.income data over the last sixty years suggests that the distribution of income

Correct AnswerverifiedShow Answer

Labor earnings make up what part of total income in the U.S.economy?

Correct AnswerverifiedShow Answer

Figure 20-2 Poverty Rates by Age -Refer to Figure 20-2.In 1968,the percent of adults aged 18 to 64 years in poverty is

Correct AnswerverifiedShow Answer

Suppose that Family A borrows money when its roof leaks.Suppose that Family B saves money when it wins $500 in a state lottery.Which of the following is correct?

Correct AnswerverifiedShow Answer

According to utilitarians,the ultimate objective of public actions should be to

Correct AnswerverifiedShow Answer

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A high marginal tax rate exists on welfa...
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