Question 1

Explain what is meant by "in-kind transfer" programs. Briefly outline the advantages and disadvantages of an in-kind transfer program.

Accepted Answer

An in-kind transfer program distributes ...

Question 2

"An extra dollar of income gives more additional satisfaction to a poor person than to a rich person." This is an important assumption of which political philosophy?

Accepted Answer

A)  utilitarianism
B)  liberalism
C)  libertarianism
D)  republicanismE) B) and C)
F) C) and D)

Question 3

The regular pattern of income variation over a person's life is called the

Accepted Answer

A)  earned income cycle.
B)  substitution effect.
C)  life cycle.
D)  pattern of change.E) All of the above
F) None of the above

Question 4

Temporary Assistance for Needy Families (TANF) is an example of a negative income tax program.

Accepted Answer

A) True 
 B)False

Question 5

Table 20-4  Source: U.S. Bureau of Census
-Refer to Table 20-4. In 2011, the bottom 60% of families have

Accepted Answer

A)  about 13% of total income in the U.S.
B)  about 28% of total income in the U.S.
C)  about 51% of total income in the U.S.
D)  about 74% of total income in the U.S.E) A) and C)
F) B) and D)

Question 6

Which of the following is not correct?

Accepted Answer

A)  Toys for Tots, a program that collects new toys to distribute to poor children at Christmas, is an example of an in-kind transfer.
B)  Supporters advocate the use of in-kind transfers because they restrict the ability of recipients to purchase alcohol and drugs.
C)  Critics argue that in-kind transfers are inefficient and disrespectful.
D)  For a program to qualify as an in-kind transfer, it must have government approval.E) A) and B)
F) All of the above

Question 7

In the United States, long-term poverty, defined as a family having an income below the poverty line for eight or more years, is

Accepted Answer

A)  common, affecting approximately 25 percent of all American families.
B)  common, affecting approximately 15 percent of all American families.
C)  uncommon, affecting approximately 8 percent of all American families.
D)  rare, affecting approximately 3 percent of all American families.E) None of the above
F) A) and C)

Question 8

Which of the following statements is correct?

Accepted Answer

A)  The United States has a more equal distribution of income than other developed countries such as Japan and Germany.
B)  The statement "a rising tide lifts all boats" illustrates how economic growth reduces the number of people with income levels below the poverty line.
C)  The economic life cycle explains why people base spending decisions on transitory income.
D)  The United States has more income inequality than developing countries, including Mexico and Brazil.E) B) and C)
F) A) and D)

Question 9

Which of the following is correct?

Accepted Answer

A)  Governments can never improve market outcomes.
B)  Governments can sometimes improve market outcomes.
C)  Governments can always improve market outcomes.
D)  Government can never make the income distribution more equal.E) A) and B)
F) None of the above

Question 10

Binding minimum-wage laws

Accepted Answer

A)  are costly for the government to impose.
B)  force a market imbalance between the supply and demand for labor.
C)  have the potential to provide benefits to all poor people, whereas a negative tax can only benefit some poor people.
D)  do not affect segments of the population who are not poor.E) All of the above
F) A) and D)

Question 11

On what type of income do many economists believe that people base their consumption?

Accepted Answer

The answer of On what type of income do many...

Question 12

U.S. income data over the last 75 years suggests that the distribution of income

Accepted Answer

A)  has gradually become more equal over the entire time period.
B)  has gradually become less equal over the entire time period.
C)  gradually became less equal until about 1970, then became more equal from 1970 to 2011.
D)  gradually became more equal until about 1970, then became less equal from 1970 to 2011.E) All of the above
F) A) and B)

Question 13

-Refer to Table 20-13. The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%. What is the value for this measure of inequality in Imagination?

Accepted Answer

The answer of 
-Refer to Table 20-13. The Human Development...

Question 14

Of the four countries below, the country that has the most income equality is

Accepted Answer

A)  Ethiopia.
B)  France.
C)  Russia.
D)  Thailand.E) All of the above
F) A) and B)

Question 15

What is one argument made by proponents of in-kind transfers over cash payments to the needy?

Accepted Answer

In-kind payments ens...

Question 16

Figure 20-1
Number of Poor 
-Refer to Figure 20-1. The absolute number of people in poverty

Accepted Answer

A)  is higher in 2011 than in 1959.
B)  is lower in 2011 than in 1959.
C)  has not changed between 1959 and 2011.
D)  has steadily decreased between 1959 and 2011.E) None of the above
F) A) and D)

Question 17

The Hicks family owns a blueberry farm in Maine. The Ward family owns a blueberry farm in Massachusetts. A drought in Massachusetts destroys half of the Ward family's harvest for one year. For the Ward family, their

Accepted Answer

A)  transitory income for the year of the drought likely exceeds their permanent income.
B)  permanent income likely exceeds their transitory income for the year of the drought.
C)  transitory income likely will be affected but the permanent income of the Hicks family will increase.
D)  permanent income likely will be affected but the permanent income of the Hicks family will not be affected.E) None of the above
F) A) and B)

Question 18

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $150,000 owe?

Accepted Answer

A)  $34,000
B)  $42,000
C)  $50,000
D)  $68,000E) B) and D)
F) A) and D)

Question 19

"Only individual members of society earn income, not society itself." This statement is most closely associated with the political philosophy of a

Accepted Answer

A)  utilitarian.
B)  liberal.
C)  libertarian.
D)  None of the above is correct.E) A) and B)
F) A) and C)

Question 20

Utilitarianism is

Accepted Answer

A)  a liberal religion that focuses on individual rights.
B)  a political philosophy that believes the government should choose policies deemed to be just by an impartial observer.
C)  a political philosophy that believes the government should not redistribute income.
D)  a political philosophy that believes the government should choose policies to maximize the total utility of society.E) B) and C)
F) A) and D)

Exam 20: Income Inequality and Poverty

The Hicks family owns a blueberry farm in Maine. The Ward family owns a blueberry farm in Massachusetts. A drought in Massachusetts destroys half of the Ward family's harvest for one year. For the Ward family, their

Correct AnswerverifiedShow Answer

"An extra dollar of income gives more additional satisfaction to a poor person than to a rich person." This is an important assumption of which political philosophy?

Correct AnswerverifiedShow Answer

Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4. In 2011, the bottom 60% of families have

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Utilitarianism is

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In the United States, long-term poverty, defined as a family having an income below the poverty line for eight or more years, is

Correct AnswerverifiedShow Answer

-Refer to Table 20-13. The Human Development Report computes a measure of inequality by dividing the income of the richest 10% of the population by the income of the poorest 10%. What is the value for this measure of inequality in Imagination?

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Which of the following is correct?

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Of the four countries below, the country that has the most income equality is

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"Only individual members of society earn income, not society itself." This statement is most closely associated with the political philosophy of a

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Which of the following is not correct?

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Explain what is meant by "in-kind transfer" programs. Briefly outline the advantages and disadvantages of an in-kind transfer program.

Correct AnswerverifiedAn in-kind transfer program distributes ...View AnswerShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Temporary Assistance for Needy Families (TANF) is an example of a negative income tax program.

Correct AnswerverifiedShow Answer

Binding minimum-wage laws

Correct AnswerverifiedShow Answer

The regular pattern of income variation over a person's life is called the

Correct AnswerverifiedShow Answer

U.S. income data over the last 75 years suggests that the distribution of income

Correct AnswerverifiedShow Answer

What is one argument made by proponents of in-kind transfers over cash payments to the needy?

Correct AnswerverifiedIn-kind payments ens...View AnswerShow Answer

On what type of income do many economists believe that people base their consumption?

Correct AnswerverifiedShow Answer

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $150,000 owe?

Correct AnswerverifiedShow Answer

Figure 20-1 Number of Poor -Refer to Figure 20-1. The absolute number of people in poverty

Correct AnswerverifiedShow Answer

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An in-kind transfer program distributes ...
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In-kind payments ens...
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