Question 1

A stock reflecting,at a given time,the financial and real assets an individual has accumulated is:

Accepted Answer

A)   income.
B)   wealth.
C)   preferences.
D)   noncash transfers.E) B) and C)
F) All of the above

Question 2

Refer to the above graph.The Gini ratio would be 0 for which curve?

Accepted Answer

A)   a
B)   b
C)   c
D)   dE) All of the above
F) None of the above

Question 3

Using the data in the above table,what percentage should be reported in blank A of column 2?

Accepted Answer

A)   5
B)   6
C)   12
D)   17The blank in column 2 is found by subtracting the percentage in column 3 for the entry $25,000 - $34,999 from the previous percentage.Thus,A is 35 - 23 = 12.E) A) and D)
F) C) and D)

Question 4

The wages and salaries that people earn differ partly because of differences in:

Accepted Answer

A)   wealth.
B)   ability.
C)   Social Security payments.
D)   in-kind transfer payments.E) C) and D)
F) All of the above

Question 5

An example of a public assistance program,as distinct from a social insurance program,would be:

Accepted Answer

A)   Medicare.
B)   Social Security.
C)   unemployment compensation.
D)   Supplemental Security Income.E) B) and C)
F) A) and C)

Question 6

Which is an example of a noncash transfer?

Accepted Answer

A)   An inheritance of $1 million
B)   Payments for labor services rendered
C)   Postage stamps
D)   MedicareE) All of the above
F) A) and D)

Question 7

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

Accepted Answer

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

Question 8

Using the data in the above table,what percentage of households made less than $15,000?

Accepted Answer

A)   5 percent
B)   6 percent
C)   11 percent
D)   23 percentE) None of the above
F) C) and D)

Question 9

The earned income tax credit (EITC) is,in essence:

Accepted Answer

A)   a tax credit for corporate contributions to charity.
B)   a tax break for businesses that invest in community programs.
C)   an income payment to those individuals who are not able to work.
D)   a wage subsidy for low-income workers to offset Social Security taxes.E) A) and B)
F) A) and C)

Question 10

Using the data in the above table,what percentage should be reported in blank C of column 3?

Accepted Answer

A)   6
B)   11
C)   35
D)   51The blank in column 3 is found by adding the value in column 2 to the previous value in column 3.Thus,C is 35 + 16 = 51.E) A) and B)
F) A) and C)

Question 11

All but which one of the following are cash transfer programs?

Accepted Answer

A)   TANF
B)   Supplemental Security Income (SSI) 
C)   Subsidized public housing
D)   Social SecurityE) A) and C)
F) A) and B)

Question 12

One of the major causes of income inequality is the difference in:

Accepted Answer

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

Question 13

Refer to the above graph.If the United States is represented by Lorenz curve (C.above,which curve would represent most other industrially advanced nations?

Accepted Answer

A)   a
B)   b
C)   c
D)   dE) None of the above
F) A) and B)

Question 14

Which statement applies to the Social Security system?

Accepted Answer

A)   Benefits are paid on the basis of need.
B)   It provides cash assistance and services to families with dependent children.
C)   It is financed by payroll taxes on employees and employers.
D)   Benefit levels vary throughout the nation because the system is administered by the individual states.E) A) and C)
F) A) and D)

Question 15

Suppose Tracy obtains 7 units of utility from the last dollar of income she receives and Brent obtains 7 units of utility from his last dollar of income.Assume both Brent and Tracy have the same capacity to derive utility from income with identical marginal-utility-of-income-curves.Those who favor an equal distribution of income would:

Accepted Answer

A)   advocate redistributing income from Brent to Tracy.
B)   advocate redistributing income from Tracy to Brent.
C)   be content with this distribution of income between Tracy and Brent.
D)   argue that any redistribution of income between them would increase total utility.E) A) and B)
F) A) and C)

Question 16

Which would be considered part of wealth?

Accepted Answer

A)   Wages and salaries
B)   Rental payments
C)   Profits from a corporation
D)   Corporate stock holdingsE) All of the above
F) A) and B)

Question 17

The diagonal line in a Lorenz curve represents perfect:

Accepted Answer

A)   inequality in the distribution of personal income.
B)   equality in the distribution of personal income.
C)   inequality in factor shares of personal income.
D)   equality in factor shares of personal income.E) A) and D)
F) A) and C)

Question 18

Using the data in the above table,what percentage of households made $75,000-$99,999?

Accepted Answer

A)   11 percent
B)   13 percent
C)   16 percent
D)   85 percentE) All of the above
F) A) and B)

Question 19

Income is more equally distributed over a longer time period than a shorter time period.

Accepted Answer

A) True 
 B)False

Question 20

When taxes and transfer payments are taken into account,the distribution of income in the United States:

Accepted Answer

A)   is unchanged.
B)   is less equally distributed.
C)   is more equally distributed.
D)   becomes more beneficial for the wealthy.E) B) and D)
F) None of the above

Exam 11: Income Inequality and Poverty

One of the major causes of income inequality is the difference in:

Correct Answer
verified

A stock reflecting,at a given time,the financial and real assets an individual has accumulated is:

Correct Answer
verified

When taxes and transfer payments are taken into account,the distribution of income in the United States:

Correct Answer
verified

Using the data in the above table,what percentage should be reported in blank C of column 3?

Correct Answer
verified

Income is more equally distributed over a longer time period than a shorter time period.

Correct Answer
verified

Using the data in the above table,what percentage of households made less than $15,000?

Correct Answer
verified

Using the data in the above table,what percentage of households made $75,000-$99,999?

Correct Answer
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The earned income tax credit (EITC) is,in essence:

Correct Answer
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Which is an example of a noncash transfer?

Correct Answer
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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?

Correct Answer
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Correct Answer
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Refer to the above graph.The Gini ratio would be 0 for which curve?

Correct Answer
verified

An example of a public assistance program,as distinct from a social insurance program,would be:

Correct Answer
verified

The wages and salaries that people earn differ partly because of differences in:

Correct Answer
verified

Using the data in the above table,what percentage should be reported in blank A of column 2?

Correct Answer
verified

The diagonal line in a Lorenz curve represents perfect:

Correct Answer
verified

Which would be considered part of wealth?

Correct Answer
verified

All but which one of the following are cash transfer programs?

Correct Answer
verified

Refer to the above graph.If the United States is represented by Lorenz curve (C.above,which curve would represent most other industrially advanced nations?

Correct Answer
verified

Which statement applies to the Social Security system?

Correct Answer
verified

Exam 11: Income Inequality and Poverty

One of the major causes of income inequality is the difference in:

Correct AnswerverifiedShow Answer

A stock reflecting,at a given time,the financial and real assets an individual has accumulated is:

Correct AnswerverifiedShow Answer

When taxes and transfer payments are taken into account,the distribution of income in the United States:

Correct AnswerverifiedShow Answer

Using the data in the above table,what percentage should be reported in blank C of column 3?

Correct AnswerverifiedShow Answer

Income is more equally distributed over a longer time period than a shorter time period.

Correct AnswerverifiedShow Answer

Using the data in the above table,what percentage of households made less than $15,000?

Correct AnswerverifiedShow Answer

Using the data in the above table,what percentage of households made $75,000-$99,999?

Correct AnswerverifiedShow Answer

The earned income tax credit (EITC) is,in essence:

Correct AnswerverifiedShow Answer

Which is an example of a noncash transfer?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the above graph.The Gini ratio would be 0 for which curve?

Correct AnswerverifiedShow Answer

An example of a public assistance program,as distinct from a social insurance program,would be:

Correct AnswerverifiedShow Answer

The wages and salaries that people earn differ partly because of differences in:

Correct AnswerverifiedShow Answer

Using the data in the above table,what percentage should be reported in blank A of column 2?

Correct AnswerverifiedShow Answer

The diagonal line in a Lorenz curve represents perfect:

Correct AnswerverifiedShow Answer

Which would be considered part of wealth?

Correct AnswerverifiedShow Answer

All but which one of the following are cash transfer programs?

Correct AnswerverifiedShow Answer

Refer to the above graph.If the United States is represented by Lorenz curve (C.above,which curve would represent most other industrially advanced nations?

Correct AnswerverifiedShow Answer

Which statement applies to the Social Security system?

Correct AnswerverifiedShow Answer

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