Question 1

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) None of the above

Question 2

By December 2009, the recession that began in December 2007

Accepted Answer

A)   had shifted 2 million people out of TANF and into the unemployment compensation system.
B)   doubled the number of people on welfare.
C)   raised the number of TANF recipients from 3.9 million to about 4.4 million.
D)   raised the number of TANF recipients to about 5 percent of the population.E) None of the above
F) A) and B)

Question 3

People's incomes are relatively low when they are young, reach a peak in middle age, and then decline. This fact helps explain

Accepted Answer

A)   the wide variations of Gini ratios among nations.
B)   the equality-efficiency trade-off.
C)   why the lifetime distribution of income is more equal than the distribution in any given year.
D)   why the lifetime distribution of income is less equal than the distribution in any given year.E) B) and D)
F) All of the above

Question 4

Statistical discrimination is also known as occupational discrimination.

Accepted Answer

A) True 
 B)False

Question 5

(Last Word)  In 2010, the wealthiest 1 percent of U.S. households held about percent of U.S. household wealth.

Accepted Answer

A)   35
B)   77
C)   23
D)   32E) B) and C)
F) A) and C)

Question 6

The primary purpose of Social Security is to

Accepted Answer

A)   subsidize families in need.
B)   offset the progressiveness of the personal income tax.
C)   provide income for workers who are temporarily unemployed.
D)   provide income for retired and disabled workers.E) None of the above
F) All of the above

Question 7

The unemployment compensation social insurance program is a

Accepted Answer

A)   purely federal government program.
B)   purely state-level government program.
C)   federal-state program.
D)   local government program.E) B) and D)
F) All of the above

Question 8

A cause of the unequal distribution of income in the United States is

Accepted Answer

A)   differences in work preferences and risks.
B)   differences in noncash transfers.
C)   high expenditures for social insurance.
D)   a low benefit-reduction rate for income.E) None of the above
F) B) and D)

Question 9

(Consider This)  Sandy currently earns wages of $20,000 per year. In her state, that qualifies her for $5,000 worth of housing credits, but those credits are withdrawn for anyone earning $22,000 per year or more. If Sandy were to find a part-time job that earned her $3,000 per year,

Accepted Answer

A)   Sandy would be worse off by $1,000 if she took the job.
B)   Sandy would be better off by $3,000 if she took the job.
C)   Sandy is equally well off financially whether she takes the job or not.
D)   Sandy would be worse off by $2,000 if she took the job.E) None of the above
F) A) and B)

Question 10

Perfect income equality would yield a Gini ratio of

Accepted Answer

A)   2.
B)   1.
C)   0.
D)   0.5.E) A) and D)
F) A) and C)

Question 11

Which one of the following would increase income inequality as measured by official census data and the quintile distribution?

Accepted Answer

A)   a doubling of Social Security retirement benefits
B)   elimination of the SNAP program
C)   elimination of the TANF program
D)   reduced divorce ratesE) A) and C)
F) All of the above

Question 12

All social insurance programs are welfare or public charity programs.

Accepted Answer

A) True 
 B)False

Question 13

The judging of an individual on the basis of the average characteristics of the group to which the individual belongs rather than the individual's characteristics is

Accepted Answer

A)   statistical discrimination.
B)   reverse discrimination.
C)   human capital discrimination.
D)   wage discrimination.E) B) and C)
F) All of the above

Question 14

Which is a payment or wage subsidy made by the Federal government to offset Social Security taxes for low-income workers?

Accepted Answer

A)   the food-stamp program
B)   Supplement Security Income
C)   the earned-income tax credit
D)   Temporary Assistance to Needy FamiliesE) A) and B)
F) All of the above

Question 15

One of the provisions of the Temporary Assistance for Needy Families (TANF)  program was to

Accepted Answer

A)   guarantee cash assistance for poor families.
B)   set a 5-year lifelong limit on welfare benefits.
C)   get the federal government to pay more of the cost of welfare.
D)   make welfare benefits more equitable among those receiving them.E) A) and C)
F) All of the above

Question 16

Which of the following is not one of the causes of the unequal distribution of income in the United States?

Accepted Answer

A)   ability differences
B)   education and training
C)   job preferences and job risks
D)   income taxes and transfersE) A) and D)
F) A) and C)

Question 17

African-American worker Jackson earns $30,000 per year; white worker Johnson earns $40,000 per year. On the basis of this information, we can conclude that

Accepted Answer

A)   it is not clear whether discrimination is present in this situation.
B)   there are no discriminatory forces at work in the labor market.
C)   Jackson is being discriminated against, but the dollar amount is unclear.
D)   Jackson is being discriminated against in the amount of $10,000 per year.E) C) and D)
F) All of the above

Question 18

The pizza analogy of income distribution would be most closely associated with which one of the following questions?

Accepted Answer

A)   If resources are used to make pizza, what other goods and services must be given up to do this?
B)   If cutting a pizza in more equal slices shrinks the pizza, how much shrinkage will society tolerate?
C)   If pizza workers were paid more money, would they become more productive workers for society?
D)   If pizza sales increase, would pizza companies redistribute the profits to their employees?E) A) and D)
F) A) and B)

Question 19

The eligibility basis for the Supplemental Nutrition Assistance Program (or SNAP, formerly called the food-stamp program)  is

Accepted Answer

A)   age.
B)   illness.
C)   income.
D)   disability.E) All of the above
F) None of the above

Question 20

The crowding model of discrimination suggests that

Accepted Answer

A)   women and selected minorities are systematically excluded from high-paying occupations and crowded into low-paying occupations, decreasing their wages and reducing domestic output.
B)   employers having high discrimination coefficients will be crowded out by nondiscriminating employers in the long run.
C)   firms will base hiring decisions on group averages, rather than on individual characteristics and productivity.
D)   occupational segregation is largely the result of freely made rational choices of women and minorities.E) B) and C)
F) All of the above

Exam 23: Income Inequality, Poverty, and Discrimination

One of the provisions of the Temporary Assistance for Needy Families (TANF) program was to

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The judging of an individual on the basis of the average characteristics of the group to which the individual belongs rather than the individual's characteristics is

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The pizza analogy of income distribution would be most closely associated with which one of the following questions?

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(Last Word) In 2010, the wealthiest 1 percent of U.S. households held about percent of U.S. household wealth.

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The crowding model of discrimination suggests that

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All social insurance programs are welfare or public charity programs.

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The eligibility basis for the Supplemental Nutrition Assistance Program (or SNAP, formerly called the food-stamp program) is

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African-American worker Jackson earns $30,000 per year; white worker Johnson earns $40,000 per year. On the basis of this information, we can conclude that

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Which of the following is not one of the causes of the unequal distribution of income in the United States?

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People's incomes are relatively low when they are young, reach a peak in middle age, and then decline. This fact helps explain

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Which is a payment or wage subsidy made by the Federal government to offset Social Security taxes for low-income workers?

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Statistical discrimination is also known as occupational discrimination.

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Perfect income equality would yield a Gini ratio of

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The unemployment compensation social insurance program is a

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A cause of the unequal distribution of income in the United States is

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Which one of the following would increase income inequality as measured by official census data and the quintile distribution?

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One of the major causes of income inequality is differences in

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(Consider This) Sandy currently earns wages of $20,000 per year. In her state, that qualifies her for $5,000 worth of housing credits, but those credits are withdrawn for anyone earning $22,000 per year or more. If Sandy were to find a part-time job that earned her $3,000 per year,

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By December 2009, the recession that began in December 2007

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The primary purpose of Social Security is to

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