Question 1

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.E) A) and C)
F) B) and D)

Question 2

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.E) C) and D)
F) B) and C)

Question 3

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.E) B) and C)
F) A) and B)

Question 4

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 SecurityE) B) and C)
F) None of the above

Question 5

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.E) A) and D)
F) B) and C)

Question 6

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 systemE) A) and D)
F) B) and D)

Question 7

All social insurance programs are welfare or public charity programs.

Accepted Answer

A) True 
 B)False

Question 8

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.E) A) and D)
F) All of the above

Question 9

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.E) B) and C)
F) A) and B)

Question 10

TANF stands for Temporary Assistance for Needy Families.

Accepted Answer

A) True 
 B)False

Question 11

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.E) None of the above
F) B) and C)

Question 12

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 13

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.E) None of the above
F) A) and D)

Question 14

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.E) None of the above
F) A) and D)

Question 15

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 16

Statistical discrimination

Accepted Answer

A)  is malicious.
B)  is profitable but not malicious.
C)  cannot persist because of competition.
D)  explains all occupational discrimination.E) All of the above
F) A) and D)

Question 17

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.E) C) and D)
F) A) and D)

Question 18

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.E) A) and C)
F) None of the above

Question 19

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.E) A) and B)
F) A) and C)

Question 20

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)  50E) A) and C)
F) All of the above

Exam 23: Income Inequality, Poverty, and Discrimination

A reduction in the redistribution of income

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The Temporary Assistance for Needy Families (TANF) program

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Which of the following statements is correct?

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

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

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Social Security is financed

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All social insurance programs are welfare or public charity programs.

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The Gini ratio

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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

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Since 1975 the distribution of income has

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

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

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The equality-efficiency trade-off refers to

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

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

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A so-called welfare cliff occurs when

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Statistical discrimination

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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.

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

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TANF stands for Temporary Assistance for Needy Families.

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