Question 1

The graph shown displays a Lorenz curve.  Which of the following statements is true?

Accepted Answer

A)  Curve B demonstrates a more equal society than curve A.
B)  The top 10 percent of earners in the society represented by curve B earn a higher percentage of total income than the top 10 percent of earners in the society represented by curve A.
C)  Curve B represents a more desirable society.
D)  Individuals in the society represented by curve B must work longer hours than individuals in the society represented in curve A in order to reach the same income.E) B) and C)
F) C) and D)

Question 2

Programs that require people to pay into a common pool, making them in turn eligible to draw on benefits under certain circumstances, are called _______ programs.

Accepted Answer

A)  social insurance
B)  social benefit
C)  common insurance
D)  equitable paymentE) A) and D)
F) A) and B)

Question 3

Suppose a community has a cash welfare program that pays $2,000 annually to individuals earning less than $20,000 per year. Jamie's salary is $19,500. She is offered a promotion that would bring her annual salary to $21,000. Jamie declines the promotion, because she would ultimately take home $500 less after losing access to cash welfare. This is an example of a reduction in _______ caused by the design of a(n) _______ program.

Accepted Answer

A)  equity; in-kind transfer
B)  equity; means-tested
C)  efficiency; in-kind transfer
D)  efficiency; means-testedE) B) and D)
F) A) and D)

Question 4

The U.S. government began tracking poverty in the late:

Accepted Answer

A)  1950s.
B)  1960s.
C)  1970s.
D)  1940s.E) All of the above
F) C) and D)

Question 5

Some say in-kind transfers are inefficient because:

Accepted Answer

A)  cash transfers allow utility-maximizing individuals to make the best decisions about items they need.
B)  vouchers can be traded in a secondary market, implying inefficient distribution.
C)  recipients find them more difficult to understand.
D)  people prefer cash over goods and services.E) None of the above
F) A) and D)

Question 6

Which of the following is an example of a means-tested program? Individuals who do not own a car are eligible for a public transportation subsidy. Families earning less than the poverty line are eligible for food stamps. Individuals who have worked in the past are eligible for Social Security benefits during retirement.

Accepted Answer

A)  I and III only
B)  I and II only
C)  II only
D)  I, II, and IIIE) C) and D)
F) A) and C)

Question 7

When a business chooses to discriminate in a competitive market:

Accepted Answer

A)  the discriminatory business will be pushed out of the market.
B)  other businesses may start discriminating to compete.
C)  the discrimination will persist if the market is efficient.
D)  None of these are true.E) A) and B)
F) A) and C)

Question 8

Once active discrimination ends, it:

Accepted Answer

A)  no longer affects people or markets.
B)  is quickly forgotten, and efficiency is reached.
C)  can have long-lasting effects on people and markets.
D)  None of these are true.E) B) and C)
F) A) and D)

Question 9

Suppose the government designs a program that provides cash assistance to low-income families as long as their income is less than $20,000 per year and they work at least 20 hours per week. This is an example of a(n) _______ program.

Accepted Answer

A)  unconditional cash-transfer
B)  conditional cash-transfer
C)  in-kind benefits
D)  mobility enhancingE) All of the above
F) A) and B)

Question 10

Conditional cash-transfer programs give financial support only to people who:

Accepted Answer

A)  engage in certain actions.
B)  have paid into the program for a minimum amount of time.
C)  agree to pay funds back at reduced interest in the future.
D)  meet minimum income threshold requirements.E) C) and D)
F) A) and B)

Question 11

Because the U.S. poverty line is an absolute measure rather than a relative one, the official U.S. poverty rate:

Accepted Answer

A)  increased steadily when economic growth raised the incomes of low-income families.
B)  fell steadily when economic growth raised the incomes of low-income families.
C)  fell steadily when economic growth caused inequality to grow among the population.
D)  increased steadily when economic growth caused inequality to decline across the population.E) A) and B)
F) None of the above

Question 12

Suppose you live in a society with perfect income mobility. This implies that:

Accepted Answer

A)  every individual has a higher probability of ending up in the highest income quintile than in the lowest income quintile.
B)  the probability of ending up in the highest income quintile is 20 percent.
C)  there is no income inequality.
D)  individuals with parents from the lowest income quintile always move to a higher income quintile.E) B) and D)
F) A) and B)

Question 13

The poverty rate dropped most dramatically over the last 25 years in which country?

Accepted Answer

A)  China
B)  Chile
C)  South Africa
D)  IndiaE) A) and D)
F) A) and C)

Question 14

More than a quarter of the U.S. population experienced _______ poverty at some point in their lives, perhaps due to losing a job or experiencing sickness or injury.

Accepted Answer

A)  transient
B)  abject
C)  chronic
D)  consecutiveE) A) and B)
F) B) and C)

Question 15

The index that describes the overall difference in prices of goods between countries is the:

Accepted Answer

A)  price parity purchasing index.
B)  consumer price index.
C)  consumer purchasing power index.
D)  purchasing power parity index.E) C) and D)
F) B) and C)

Question 16

The $1.90 (PPP) per day line was chosen by averaging the national poverty lines of 15 poor countries to represent _______ poverty by some globally comparable standard.

Accepted Answer

A)  chronic
B)  absolute
C)  transient
D)  relativeE) C) and D)
F) None of the above

Question 17

Inequality between countries, in terms of differences in their average national incomes, has been:

Accepted Answer

A)  increasing over recent decades.
B)  decreasing over recent decades.
C)  decreasing since the 1930s.
D)  increasing since the 1930s.E) C) and D)
F) B) and C)

Question 18

Community-wide poverty:

Accepted Answer

A)  is nonexistent in the developed world.
B)  creates problems beyond those faced by poor individuals living in wealthier communities.
C)  only creates problems in less wealthy countries.
D)  None of these are true.E) A) and D)
F) C) and D)

Question 19

Average income for adults still varies widely across gender and racial groups in the United States, which tells us that:

Accepted Answer

A)  race and gender differences cause differences in income.
B)  discrimination causes differences in income across race and gender groups.
C)  income is correlated with race and gender.
D)  All of these are true.E) B) and C)
F) A) and D)

Question 20

A credit constraint is the:

Accepted Answer

A)  inability to get a loan even though a person expects to be able to repay the loan plus interest.
B)  inability to repay a loan even though a person has acceptable credit history.
C)  ability to take on more loans than one can repay.
D)  maximum amount of loans one is entitled to take.E) A) and B)
F) None of the above

Exam 21: Poverty, Inequality, and Discrimination

When a business chooses to discriminate in a competitive market:

Correct Answer
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A credit constraint is the:

Correct Answer
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Once active discrimination ends, it:

Correct Answer
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Suppose you live in a society with perfect income mobility. This implies that:

Correct Answer
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Programs that require people to pay into a common pool, making them in turn eligible to draw on benefits under certain circumstances, are called _______ programs.

Correct Answer
verified

More than a quarter of the U.S. population experienced _______ poverty at some point in their lives, perhaps due to losing a job or experiencing sickness or injury.

Correct Answer
verified

The U.S. government began tracking poverty in the late:

Correct Answer
verified

Because the U.S. poverty line is an absolute measure rather than a relative one, the official U.S. poverty rate:

Correct Answer
verified

The $1.90 (PPP) per day line was chosen by averaging the national poverty lines of 15 poor countries to represent _______ poverty by some globally comparable standard.

Correct Answer
verified

Suppose the government designs a program that provides cash assistance to low-income families as long as their income is less than $20,000 per year and they work at least 20 hours per week. This is an example of a(n) _______ program.

Correct Answer
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Correct Answer
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Some say in-kind transfers are inefficient because:

Correct Answer
verified

The graph shown displays a Lorenz curve. Which of the following statements is true?

Correct Answer
verified

Inequality between countries, in terms of differences in their average national incomes, has been:

Correct Answer
verified

The poverty rate dropped most dramatically over the last 25 years in which country?

Correct Answer
verified

Community-wide poverty:

Correct Answer
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The index that describes the overall difference in prices of goods between countries is the:

Correct Answer
verified

Correct Answer
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Conditional cash-transfer programs give financial support only to people who:

Correct Answer
verified

Average income for adults still varies widely across gender and racial groups in the United States, which tells us that:

Correct Answer
verified

Exam 21: Poverty, Inequality, and Discrimination

When a business chooses to discriminate in a competitive market:

Correct AnswerverifiedShow Answer

A credit constraint is the:

Correct AnswerverifiedShow Answer

Once active discrimination ends, it:

Correct AnswerverifiedShow Answer

Suppose you live in a society with perfect income mobility. This implies that:

Correct AnswerverifiedShow Answer

Programs that require people to pay into a common pool, making them in turn eligible to draw on benefits under certain circumstances, are called _______ programs.

Correct AnswerverifiedShow Answer

More than a quarter of the U.S. population experienced _______ poverty at some point in their lives, perhaps due to losing a job or experiencing sickness or injury.

Correct AnswerverifiedShow Answer

The U.S. government began tracking poverty in the late:

Correct AnswerverifiedShow Answer

Because the U.S. poverty line is an absolute measure rather than a relative one, the official U.S. poverty rate:

Correct AnswerverifiedShow Answer

The $1.90 (PPP) per day line was chosen by averaging the national poverty lines of 15 poor countries to represent _______ poverty by some globally comparable standard.

Correct AnswerverifiedShow Answer

Suppose the government designs a program that provides cash assistance to low-income families as long as their income is less than $20,000 per year and they work at least 20 hours per week. This is an example of a(n) _______ program.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Some say in-kind transfers are inefficient because:

Correct AnswerverifiedShow Answer

The graph shown displays a Lorenz curve. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Inequality between countries, in terms of differences in their average national incomes, has been:

Correct AnswerverifiedShow Answer

The poverty rate dropped most dramatically over the last 25 years in which country?

Correct AnswerverifiedShow Answer

Community-wide poverty:

Correct AnswerverifiedShow Answer

The index that describes the overall difference in prices of goods between countries is the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Conditional cash-transfer programs give financial support only to people who:

Correct AnswerverifiedShow Answer

Average income for adults still varies widely across gender and racial groups in the United States, which tells us that:

Correct AnswerverifiedShow Answer

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