Question 1

Discrimination creates a

Accepted Answer

A)   redistribution of a larger domestic output.
B)   larger domestic output but no redistribution.
C)   smaller domestic output but no redistribution.
D)   redistribution of a smaller domestic output.E) A) and B)
F) None of the above

Question 2

Entitlement programs include

Accepted Answer

A)   welfare programs only.
B)   social insurance programs only.
C)   both public assistance programs and social insurance programs.
D)   welfare programs and public assistance programs.E) A) and D)
F) B) and C)

Question 3

The Gini ratio, or Gini coefficient, is a measure of the

Accepted Answer

A)   inflationary gap.
B)   recessionary gap.
C)   number of households that are classified as being poor.
D)   degree of income inequality.E) A) and C)
F) B) and D)

Question 4

A Lorenz curve showing perfect equality in the distribution of income

Accepted Answer

A)   coincides with the horizontal axis.
B)   coincides with the vertical axis.
C)   is a straight line with a 45-degree angle.
D)   is a curve bowed to the southwest.E) C) and D)
F) A) and C)

Question 5

The equality-efficiency trade-off would be most closely associated with which one of the following statements?

Accepted Answer

A)   The rich get richer and the poor get poorer.
B)   The only way to create income equality is to take from the rich and give to the poor.
C)   If cutting the income pie in more equal slices tends to shrink the pie, what amount of shrinkage will society tolerate?
D)   People are less concerned with the larger question of income distribution than they are with the more specific issue of income inadequacy.E) A) and B)
F) B) and C)

Question 6

The lowest quintile of households in the income distribution (as of 2014)  receives about

Accepted Answer

A)   2.4 percent of the total income.
B)   3.1 percent of the total income.
C)   8.2 percent of the total income.
D)   10 percent of the total income.E) None of the above
F) A) and D)

Question 7

A major difference between social insurance and welfare is that social insurance

Accepted Answer

A)   exclusively involves older Americans, whereas welfare is confined mainly to mothers with young children.
B)   forces recipients to demonstrate need, while welfare does not.
C)   is normally financed by earmarked payroll taxes, while welfare is financed out of general tax revenues.
D)   provides cash transfers, while welfare does not.E) C) and D)
F) B) and C)

Question 8

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 D)
F) B) and C)

Question 9

The so-called 90-10 ratio (the hourly wage at the 90th percentile compared to that at the 10th percentile)  was roughly how much in 2007?

Accepted Answer

A)   2.5
B)   4.5
C)   8.0
D)   10.5E) A) and B)
F) A) and C)

Question 10

The Temporary Assistance for Needy Families (TANF) program that replaced the old Aid for Families with Dependent Children welfare program succeeded in reducing the number of welfare recipients and increasing the employment rate among single mothers.

Accepted Answer

A) True 
 B)False

Question 11

The Great Recession of 2007-2009 caused U.S. family wealth to shrink, mostly due to the sharp decline in

Accepted Answer

A)   family incomes.
B)   consumer spending.
C)   average house prices.
D)   employment and wages.E) None of the above
F) B) and C)

Question 12

Which of the following terms describes a system of subsidized health insurance available to the aged?

Accepted Answer

A)   Medicare
B)   Supplemental Security Income (SSI) 
C)   Medicaid
D)   TANFE) A) and C)
F) All of the above

Question 13

Which is correct?

Accepted Answer

A)   Wealth is less equally distributed than income and therefore increases income inequality.
B)   Wealth is more equally distributed than income and therefore increases income inequality.
C)   Wealth is less equally distributed than income and therefore decreases income inequality.
D)   Wealth is more equally distributed than income and therefore decreases income inequality.E) A) and D)
F) A) and C)

Question 14

Income mobility

Accepted Answer

A)   contributes to greater wealth inequality in the United States.
B)   is less in the United States than in most developing nations.
C)   is the movement of individuals and households from one income quintile to another over time.
D)   makes lifetime income inequality among income receivers in the United States greater than income inequality in any single year.E) C) and D)
F) A) and D)

Question 15

The Gini ratio is calculated by dividing the area between the Lorenz curve and the diagonal by the

Accepted Answer

A)   remaining area below the diagonal.
B)   total area below the diagonal.
C)   total area of the box or rectangle.
D)   remaining area of the box or rectangle.E) A) and D)
F) A) and C)

Question 16

Labor market discrimination occurs when equivalent labor resources are paid or treated differently even though their productive contributions are equal.

Accepted Answer

A) True 
 B)False

Question 17

The exercise of market power by suppliers in resource markets tends to

Accepted Answer

A)   reduce income inequality, ensuring that all workers receive fair wages.
B)   have little impact on the distribution of income.
C)   increase income inequality by raising incomes of those able to "rig the market."
D)   increase income inequality but is offset by the exercise of market power in product markets.E) A) and B)
F) A) and D)

Question 18

The necessity to maintain incentives to work and incentives to produce output would be a point made by an individual making the case for

Accepted Answer

A)   income equality.
B)   income inequality.
C)   maximizing total utility.
D)   maximizing marginal utility.E) B) and D)
F) B) and C)

Question 19

Social insurance programs partially replace income that has been lost due to the following, except

Accepted Answer

A)   retirement.
B)   disabilities.
C)   temporary unemployment.
D)   resignation from a job.E) B) and C)
F) All of the above

Question 20

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) A) and B)
F) All of the above

Exam 23: Income Inequality, Poverty, and Discrimination

The Temporary Assistance for Needy Families (TANF) program

Correct AnswerverifiedShow Answer

The exercise of market power by suppliers in resource markets tends to

Correct AnswerverifiedShow Answer

The Gini ratio, or Gini coefficient, is a measure of the

Correct AnswerverifiedShow Answer

The Great Recession of 2007-2009 caused U.S. family wealth to shrink, mostly due to the sharp decline in

Correct AnswerverifiedShow Answer

Income mobility

Correct AnswerverifiedShow Answer

Entitlement programs include

Correct AnswerverifiedShow Answer

Social insurance programs partially replace income that has been lost due to the following, except

Correct AnswerverifiedShow Answer

Labor market discrimination occurs when equivalent labor resources are paid or treated differently even though their productive contributions are equal.

Correct AnswerverifiedShow Answer

The Temporary Assistance for Needy Families (TANF) program that replaced the old Aid for Families with Dependent Children welfare program succeeded in reducing the number of welfare recipients and increasing the employment rate among single mothers.

Correct AnswerverifiedShow Answer

The necessity to maintain incentives to work and incentives to produce output would be a point made by an individual making the case for

Correct AnswerverifiedShow Answer

Discrimination creates a

Correct AnswerverifiedShow Answer

Social Security is financed

Correct AnswerverifiedShow Answer

A major difference between social insurance and welfare is that social insurance

Correct AnswerverifiedShow Answer

The so-called 90-10 ratio (the hourly wage at the 90th percentile compared to that at the 10th percentile) was roughly how much in 2007?

Correct AnswerverifiedShow Answer

The lowest quintile of households in the income distribution (as of 2014) receives about

Correct AnswerverifiedShow Answer

The Gini ratio is calculated by dividing the area between the Lorenz curve and the diagonal by the

Correct AnswerverifiedShow Answer

The equality-efficiency trade-off would be most closely associated with which one of the following statements?

Correct AnswerverifiedShow Answer

A Lorenz curve showing perfect equality in the distribution of income

Correct AnswerverifiedShow Answer

Which is correct?

Correct AnswerverifiedShow Answer

Which of the following terms describes a system of subsidized health insurance available to the aged?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified