Question 1

In 2017, the highest quintile of households in the U.S. income distribution received about

Accepted Answer

A)  43 percent of total income.
B)  30 percent of total income.
C)  62 percent of total income.
D)  52 percent of total income.E) None of the above
F) B) and C)

Question 2

Minority workers are underrepresented and have less access to certain high-paying occupations. This illustrates

Accepted Answer

A)  human-capital discrimination.
B)  the crowding model.
C)  the taste-for-discrimination model.
D)  statistical discrimination.E) All of the above
F) A) and B)

Question 3

In 2017, a household with an annual income of $50,000 would find itself in the

Accepted Answer

A)  highest quintile of the household income distribution.
B)  second quintile of the household income distribution.
C)  third quintile of the household income distribution.
D)  fourth quintile of the household income distribution.E) A) and C)
F) B) and C)

Question 4

In a supply and demand model of the labor market for nonpreferred workers, a reduction in employer prejudice against nonpreferred workers will

Accepted Answer

A)  increase supply, raise the wage rate, and decrease the employment of these workers.
B)  decrease supply, lower the wage rate, and decrease employment of these workers.
C)  decrease demand, lower the wage rate, and decrease the employment of these workers.
D)  increase demand, raise the wage rate, and increase the employment of these workers.E) A) and B)
F) C) and D)

Question 5

When welfare payments like housing credits are completely cut off when the recipient's income goes above a certain threshold, then this could discourage the recipient from finding more work or a better-paying job.

Accepted Answer

A) True 
 B)False

Question 6

Wealth

Accepted Answer

A)  is a flow concept.
B)  refers to accumulated financial assets only.
C)  refers to accumulated real assets only.
D)  refers to accumulated financial and real assets.E) C) and D)
F) A) and D)

Question 7

Which of the following is correct?

Accepted Answer

A)  Income is a stock concept, and wealth is a flow concept.
B)  Both income and wealth are flow concepts.
C)  Both income and wealth are stock concepts.
D)  Income is a flow concept, and wealth is a stock concept.E) A) and B)
F) B) and C)

Question 8

Which of the following would be an example of how pure luck contributes to income inequality?

Accepted Answer

A)  approval to receive unemployment benefits
B)  receipt of a government grant for housing
C)  selection as winner of a state lottery
D)  admission to a state universityE) C) and D)
F) A) and B)

Question 9

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

Question 10

One of the major causes of income inequality is differences in

Accepted Answer

A)  unemployment benefits.
B)  transportation.
C)  education.
D)  housing.E) All of the above
F) A) and B)

Question 11

The Lorenz curve

Accepted Answer

A)  plots graphically the poverty rate over time.
B)  is located closer to the diagonal today than it was in 1980.
C)  plots graphically the distribution of income.
D)  is located farther from the diagonal when income is defined to include the value of noncash transfers.E) All of the above
F) None of the above

Question 12

Ending discrimination against minority groups in educational processes and in employment situations would cause total domestic output to

Accepted Answer

A)  fall because of the increased costs of training and living.
B)  rise because spending on consumer goods and services would decrease.
C)  rise because of an increase in the productivity of the labor force.
D)  fall, since trained minority workers would force some present workers out of their jobs.E) None of the above
F) A) and B)

Question 13

Which of the following demographic groups does not bear a disproportionate burden of poverty?

Accepted Answer

A)  households headed by women
B)  persons 65 or over
C)  Hispanics
D)  children under 18E) A) and B)
F) A) and D)

Question 14

Refer to the diagram. If line (c) represents the distribution of income in 1980 in the United States, we would expect the distribution of income for 2017 to be more like

Accepted Answer

A)  line (a) .
B)  line (b) .
C)  line (c) .
D)  line (d) .E) A) and B)
F) A) and C)

Question 15

Which statement best describes the data in the table?

Accepted Answer

A)  Between 1980 and 2015, the highest 20 percent of households gained a larger share of total income at the expense of the lowest 80 percent.
B)  Between 1980 and 2015, the lowest and the highest quintiles gained larger shares of total income at the expense of the three middle quintiles.
C)  Between 1980 and 2015, the lowest 40 percent of households gained a larger share of total income at the expense of the highest 40 percent.
D)  Between 1980 and 2015, each quintile gained a larger share of total income because the level of total income increased greatly.E) C) and D)
F) B) and D)

Question 16

Which of the following is a noncash transfer?

Accepted Answer

A)  a payment to a divorced mother under TANF
B)  SNAP (food stamps) 
C)  a Social Security payment to a retiree
D)  unemployment compensation benefitsE) A) and D)
F) B) and C)

Question 17

In the taste-for-discrimination model,

Accepted Answer

A)  a decline in discrimination will reduce the actual African-American-white wage ratio.
B)  an increase in collective discrimination coefficients of employers will reduce the demand for African-American workers, decrease the African-American wage, and increase African-American employment.
C)  firms that discriminate will have lower costs than firms that do not discriminate.
D)  competitive forces will tend to reduce discrimination in the very long run.E) All of the above
F) B) and C)

Question 18

One main complaint about the official income thresholds used in defining poverty is that they

Accepted Answer

A)  fail to account for the effects of the minimum wage.
B)  have remained fixed for over the past two decades.
C)  include noncash benefits such as food stamps and rent subsidies.
D)  are inadequate to meet basic needs in major metropolitan areas.E) C) and D)
F) All of the above

Question 19

Which of the following statements about the Temporary Assistance for Needy Families (TANF) program is not true?

Accepted Answer

A)  It expanded the eligibility for and scope of the nation's welfare program.
B)  It is the basic welfare program for low-income families in the U.S.
C)  In 1996, it replaced the six-decade-old Aid for Families with Dependent Children (AFD
C)  welfare program.
D)  It led to a reduction in the number of welfare recipients and an increase in the employment rate of single mothers in the years after its adoption.E) None of the above
F) All of the above

Question 20

U.S. income statistics indicate that approximately one-eighth of the nation lived in poverty in 2017.

Accepted Answer

A) True 
 B)False

Exam 23: Income Inequality, Poverty, and Discrimination

Statistical discrimination

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U.S. income statistics indicate that approximately one-eighth of the nation lived in poverty in 2017.

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Which of the following demographic groups does not bear a disproportionate burden of poverty?

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In 2017, the highest quintile of households in the U.S. income distribution received about

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Wealth

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When welfare payments like housing credits are completely cut off when the recipient's income goes above a certain threshold, then this could discourage the recipient from finding more work or a better-paying job.

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Ending discrimination against minority groups in educational processes and in employment situations would cause total domestic output to

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Which statement best describes the data in the table?

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Which of the following is correct?

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In 2017, a household with an annual income of $50,000 would find itself in the

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Minority workers are underrepresented and have less access to certain high-paying occupations. This illustrates

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The Lorenz curve

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In the taste-for-discrimination model,

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Which of the following would be an example of how pure luck contributes to income inequality?

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One of the major causes of income inequality is differences in

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Which of the following is a noncash transfer?

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Refer to the diagram. If line (c) represents the distribution of income in 1980 in the United States, we would expect the distribution of income for 2017 to be more like

Correct AnswerverifiedShow Answer

One main complaint about the official income thresholds used in defining poverty is that they

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In a supply and demand model of the labor market for nonpreferred workers, a reduction in employer prejudice against nonpreferred workers will

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Which of the following statements about the Temporary Assistance for Needy Families (TANF) program is not true?

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