Question 1

According to a libertarian,if income were to be distributed equally,

Accepted Answer

A)   productivity would increase.
B)   social utility would increase.
C)   the marginal productivity of the poor would fall,whereas the marginal productivity of the rich would rise.
D)   productivity would decrease.E) A) and B)
F) A) and C)

Question 2

The top 5 percent of U.S.annual family income in 2005 was $184,500 or more.

Accepted Answer

A) True 
 B)False

Question 3

The U.S.welfare system was revised by a 1996 law that

Accepted Answer

A)   consolidated all of the previous assistance programs into a single program.
B)   limited the amount of time that people could receive assistance.
C)   said it was no longer necessary for poor people to demonstrate an additional "need," such as small children or a disability,to qualify for assistance.
D)   turned all federally-run welfare programs over to the states.E) B) and C)
F) A) and C)

Question 4

Since the early 1970s,average incomes have

Accepted Answer

A)   increased,which has reduced the poverty rate.
B)   increased,while the poverty rate increased slightly.
C)   decreased,while the poverty rate has remained unchanged.
D)   remained unchanged,while the poverty rate has decreased.E) B) and D)
F) B) and C)

Question 5

A U.S.family earning $80,000 would be in the top 20 percent of income distribution in 2005.

Accepted Answer

A) True 
 B)False

Question 6

Unemployment insurance benefits is a type of

Accepted Answer

A)   in-kind transfer.
B)   negative income tax payment.
C)   property income.
D)   welfare payment.E) A) and B)
F) A) and C)

Question 7

Suppose that a family saves and borrows to buffer itself against changes in income.These actions relate to which problem in measuring inequality?

Accepted Answer

A)   In-kind transfers.
B)   Negative income tax.
C)   Transitory versus permanent income.
D)   Economic mobility.E) A) and D)
F) A) and C)

Question 8

Fewer than three percent of families are poor for eight or more years.

Accepted Answer

A) True 
 B)False

Question 9

Liberalism is founded on a premise that behind a "veil of ignorance,"

Accepted Answer

A)   justice cannot be agreed upon.
B)   everyone's income should be equal.
C)   everyone would agree to "just" rules to reallocate income.
D)   society should maximize the sum of individual utilities.E) B) and C)
F) A) and C)

Question 10

Which of the following statements is correct?

Accepted Answer

A)   The poverty line is a relative standard.
B)   Economic growth that raises all incomes will decrease the number of families in poverty.
C)   Increasing income inequality reduces poverty.
D)   Economic growth,by definition,affects all families equally.E) All of the above
F) B) and C)

Question 11

Since the early 1970s,welfare benefits have declined,

Accepted Answer

A)   which is largely due to the success of the negative income tax program.
B)   which is largely due to the success of private charities.
C)   yet the percentage of children living with only one parent has increased.
D)   and the percentage of children living with only one parent has decreased.E) C) and D)
F) None of the above

Question 12

Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

Accepted Answer

A)   Utilitarianism.
B)   Liberalism.
C)   Libertarianism.
D)   Welfarism.E) None of the above
F) B) and C)

Question 13

Economic mobility in the United States is so great that fewer than

Accepted Answer

A)   3 percent of families are poor for 8 or more years.
B)   5 percent of families are poor for 8 or more years.
C)   8 percent of families are poor for 8 or more years.
D)   10 percent of families are poor for 8 or more years.E) C) and D)
F) All of the above

Question 14

In 2005 the top fifth of income earners accounted for over 50% of all income received by United States' families.

Accepted Answer

A) True 
 B)False

Question 15

In general,which of the following would libertarians argue is more important than equal outcomes?

Accepted Answer

A)   Equal opportunities.
B)   Equal incomes.
C)   Providing a social safety net.
D)   Assuring fair compensation for workers.E) B) and D)
F) B) and C)

Question 16

Suppose that Family A borrows money when its car breaks down and saves money when the wife receives a holiday bonus from her employer.Suppose that Family B borrows money to buy elaborate birthday presents for the children and spends the husband's holiday bonus on a vacation to Florida.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) B) and C)
F) All of the above

Question 17

Which of the following statements is correct?

Accepted Answer

A)   A disadvantage of a minimum-wage law is that it may benefit unskilled workers who are not low-income workers.
B)   A disadvantage of a negative income tax program is that a poor person who chooses not to work many hours would receive a cash benefit.
C)   A disadvantage of an Earned Income Tax Credit (EIT
C)  is that a person who is unable to work due to a disability does not benefit from the program.
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 18

Compare and contrast the "life cycle" hypothesis and the "permanent income" hypothesis.What are their respective implications for inequality in the income distribution?

Accepted Answer

Life-cycle variation in income suggests ...

Question 19

In the United States,a typical worker's income peaks around age

Accepted Answer

A)   70
B)   60
C)   60.
D)   40E) A) and B)
F) A) and C)

Question 20

Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?

Accepted Answer

A)   A more efficient allocation of resources.
B)   A distortion of incentives.
C)   Unchanged behavior.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Exam 20: Income Inequality and Poverty

The top 5 percent of U.S.annual family income in 2005 was $184,500 or more.

Correct Answer
verified

In the United States,a typical worker's income peaks around age

Correct Answer
verified

In 2005 the top fifth of income earners accounted for over 50% of all income received by United States' families.

Correct Answer
verified

Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

Correct Answer
verified

Economic mobility in the United States is so great that fewer than

Correct Answer
verified

Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?

Correct Answer
verified

Liberalism is founded on a premise that behind a "veil of ignorance,"

Correct Answer
verified

Suppose that a family saves and borrows to buffer itself against changes in income.These actions relate to which problem in measuring inequality?

Correct Answer
verified

Since the early 1970s,average incomes have

Correct Answer
verified

A U.S.family earning $80,000 would be in the top 20 percent of income distribution in 2005.

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

The U.S.welfare system was revised by a 1996 law that

Correct Answer
verified

Correct Answer
verified

Fewer than three percent of families are poor for eight or more years.

Correct Answer
verified

Since the early 1970s,welfare benefits have declined,

Correct Answer
verified

Compare and contrast the "life cycle" hypothesis and the "permanent income" hypothesis.What are their respective implications for inequality in the income distribution?

Correct Answer
verified
Life-cycle variation in income suggests ...
View Answer

Unemployment insurance benefits is a type of

Correct Answer
verified

According to a libertarian,if income were to be distributed equally,

Correct Answer
verified

In general,which of the following would libertarians argue is more important than equal outcomes?

Correct Answer
verified

Exam 20: Income Inequality and Poverty

The top 5 percent of U.S.annual family income in 2005 was $184,500 or more.

Correct AnswerverifiedShow Answer

In the United States,a typical worker's income peaks around age

Correct AnswerverifiedShow Answer

In 2005 the top fifth of income earners accounted for over 50% of all income received by United States' families.

Correct AnswerverifiedShow Answer

Which political philosophy focuses on the process of determining the distribution of income rather than on the outcome?

Correct AnswerverifiedShow Answer

Economic mobility in the United States is so great that fewer than

Correct AnswerverifiedShow Answer

Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?

Correct AnswerverifiedShow Answer

Liberalism is founded on a premise that behind a "veil of ignorance,"

Correct AnswerverifiedShow Answer

Suppose that a family saves and borrows to buffer itself against changes in income.These actions relate to which problem in measuring inequality?

Correct AnswerverifiedShow Answer

Since the early 1970s,average incomes have

Correct AnswerverifiedShow Answer

A U.S.family earning $80,000 would be in the top 20 percent of income distribution in 2005.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The U.S.welfare system was revised by a 1996 law that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Fewer than three percent of families are poor for eight or more years.

Correct AnswerverifiedShow Answer

Since the early 1970s,welfare benefits have declined,

Correct AnswerverifiedShow Answer

Compare and contrast the "life cycle" hypothesis and the "permanent income" hypothesis.What are their respective implications for inequality in the income distribution?

Correct AnswerverifiedLife-cycle variation in income suggests ...View AnswerShow Answer

Unemployment insurance benefits is a type of

Correct AnswerverifiedShow Answer

According to a libertarian,if income were to be distributed equally,

Correct AnswerverifiedShow Answer

In general,which of the following would libertarians argue is more important than equal outcomes?

Correct AnswerverifiedShow Answer

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Life-cycle variation in income suggests ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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