Question 1

Table 20-1
The following table shows the distribution of income in Thomasville.
 
-Refer to Table 20-1.If the poverty line was $29,075,what would be the poverty rate?

Accepted Answer

A)   less than 25%
B)   between 25% and 50%
C)   between 50% and 75%
D)   There is insufficient information to answer this question.E) A) and D)
F) C) and D)

Question 2

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 B)
F) None of the above

Question 3

Figure 20-4
Poverty Rates by Age
 
-Refer to Figure 20-4.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)   lower than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty.
D)   lower than the percentage of children under age 18 but is higher than the percentage of elderly aged 65 and over in poverty.E) None of the above
F) All of the above

Question 4

In 2008,the poverty rate in the United States was

Accepted Answer

A)   2.5 percent.
B)   12.6 percent.
C)   13.2 percent.
D)   22.4 percent.E) None of the above
F) All of the above

Question 5

Scenario 20-3
Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability:
Taxes owed = (1/3 of income)  - $15,000
-Refer to Scenario 20-3.This negative income tax would guarantee what minimum level of income to every family?

Accepted Answer

A)   $5,000
B)   $10,000
C)   $15,000
D)   $30,000E) All of the above
F) B) and C)

Question 6

"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)   welfarismE) None of the above
F) A) and C)

Question 7

Given the table shown,which country has a more equal income distribution? Explain your answer.

Accepted Answer

Country A has a more equal income distri...

Question 8

Scenario 20-2
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)  - $20,000
-Refer to Scenario 20-2.A family earning $60,000 before taxes would have how much after-tax income?

Accepted Answer

A)   -$5,000
B)   $25,000
C)   $55,000
D)   $65,000E) None of the above
F) A) and D)

Question 9

Which of the following groups has the lowest poverty rate?

Accepted Answer

A)   blacks
B)   Asians
C)   children (under age 18) 
D)   female households, no spouse presentE) B) and C)
F) A) and B)

Question 10

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) B) and C)
F) A) and D)

Question 11

Which of the following is not correct?

Accepted Answer

A)   Welfare is a broad term that includes a variety of government programs designed to help poor people.
B)   Since the early 1970s, welfare benefits adjusted for inflation have increased, as has the percentage of children living with only one parent.
C)   Critics of welfare programs argue that they can create incentives for unmarried women to have children.
D)   Supporters argue that welfare doesn't cause the decline of two-parent families.E) B) and D)
F) None of the above

Question 12

Figure 20-2
Number of Poor
 
-Refer to Figure 20-2.The absolute number of people in poverty

Accepted Answer

A)   is higher in 2001 than in 1959.
B)   is lower in 2001 than in 1959.
C)   has not changed between 1959 and 2001.
D)   has steadily decreased between 1959 and 2001.E) A) and C)
F) A) and B)

Question 13

An advantage of a negative income tax is that it does not encourage the breakup of families because the only criterion for assistance is family income.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is not correct?

Accepted Answer

A)   An advantage of an in-kind transfer is that it prevents an alcoholic from spending a cash benefit on alcohol.
B)   An advantage of the Supplemental Security Income (SSI)  program is that it benefits the sick and disabled.
C)   An advantage of a negative income tax program is that the poor must work in order to be eligible.
D)   Minimum wage laws result in higher unemployment among those groups of workers affected by the minimum wage.E) C) and D)
F) All of the above

Question 15

Table 20-4
  
Source: U.S. Bureau of Census
-Refer to Table 20-4.In 2007,the top fifth of families have

Accepted Answer

A)   almost 15 times as much income as the bottom fifth of families.
B)   96.6% more income than the bottom fifth of families.
C)   50.3% more income than the bottom fifth of families.
D)   46.9% more income than the bottom fifth of families.E) B) and C)
F) None of the above

Question 16

Economic mobility refers to the

Accepted Answer

A)   government's attempt to distribute monetary assistance to areas most in need.
B)   ability of families to freely relocate to find good jobs.
C)   movement of people among income classes.
D)   movement of resources from one country to another.E) A) and D)
F) C) and D)

Question 17

Many economists believe that a family bases its spending decisions on its permanent,or average,income rather than on transitory income.

Accepted Answer

A) True 
 B)False

Question 18

A disadvantage associated with an Earned Income Tax Credit (EITC) program to reduce poverty is that it

Accepted Answer

A)   encourages illegitimate births because single women with children receive higher payments.
B)   rewards laziness because it provides payments to those with low incomes regardless of their work effort.
C)   does not help the poor who are unemployed.
D)   creates unemployment by increasing the wage paid to unskilled workers above the equilibrium wage.E) None of the above
F) B) and C)

Question 19

The best government policy to reduce poverty is

Accepted Answer

A)   a minimum wage law because the resulting unemployment is small in comparison to the benefits to people it helps.
B)   an expanded welfare program because people must have an additional "need" such as small children or a disability.
C)   an in-kind transfer because it ensures that the poor receive what they need most such as food or shelter.
D)   not obvious. Government programs to reduce poverty have many advantages but also many disadvantages.E) B) and C)
F) A) and D)

Question 20

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 around the middle of the group.
D)   is second to China as the most unequal distribution.E) C) and D)
F) All of the above

Exam 20: Income Inequality and Poverty.

Economic mobility refers to the

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A disadvantage associated with an Earned Income Tax Credit (EITC) program to reduce poverty is that it

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Scenario 20-2 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) - $20,000 -Refer to Scenario 20-2.A family earning $60,000 before taxes would have how much after-tax income?

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Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4.In 2007,the top fifth of families have

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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

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In 2008,the poverty rate in the United States was

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Which of the following statements is not correct?

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Figure 20-4 Poverty Rates by Age -Refer to Figure 20-4.In 1968,the percent of adults aged 18 to 64 years in poverty is

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

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Table 20-1 The following table shows the distribution of income in Thomasville. -Refer to Table 20-1.If the poverty line was $29,075,what would be the poverty rate?

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

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Scenario 20-3 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/3 of income) - $15,000 -Refer to Scenario 20-3.This negative income tax would guarantee what minimum level of income to every family?

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An advantage of a negative income tax is that it does not encourage the breakup of families because the only criterion for assistance is family income.

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Given the table shown,which country has a more equal income distribution? Explain your answer.

Correct AnswerverifiedCountry A has a more equal income distri...View AnswerShow Answer

Which of the following is not correct?

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Many economists believe that a family bases its spending decisions on its permanent,or average,income rather than on transitory income.

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Figure 20-2 Number of Poor -Refer to Figure 20-2.The absolute number of people in poverty

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The best government policy to reduce poverty is

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Which of the following groups has the lowest poverty rate?

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

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Country A has a more equal income distri...
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