Question 1

Economic mobility in the United States is

Accepted Answer

A)   uncommon. Over 50 percent of poor families remain poor for 8 or more years.
B)   uncommon. Over 75 percent of poor families remain poor for 8 or more years.
C)   common. Fewer than 3 percent of poor families remain poor for 8 or more years.
D)   common. Fewer than 1 percent of poor families remain poor for 8 or more years.E) B) and C)
F) A) and C)

Question 2

Table 20-14
Income Inequality in the United States
The values in the table reflect the percentages of pre-tax-and transfer income.
  Source: US Census Bureau
-Refer to Table 20-14. The trend in income inequality from 1980 to 2010 is .

Accepted Answer

The answer of Table 20-14
Income Inequality in the United States
The...

Question 3

In 2011, the poverty rate in the United States was 15 percent. This means that 15 percent

Accepted Answer

A)   of the population had a total family income that fell below the poverty line.
B)   of the population had a total family income that was above the poverty line.
C)   of the population had a total family income below $10,000.
D)   of the population had a total family income above $50,000.E) None of the above
F) B) and C)

Question 4

Which political philosophy believes that the government should equalize the incomes of all members of society?

Accepted Answer

A)   Utilitarianism.
B)   Liberalism.
C)   Libertarianism.
D)   None of the above is correct.E) All of the above
F) B) and D)

Question 5

In 2011, the top 20% of US families had more than times as much income as the bottom 20%.

Accepted Answer

The answer of In 2011, the top 20% of US...

Question 6

In general, which of the following would libertarians argue is more important than equal outcomes?

Accepted Answer

A)   equal opportunities
B)   equal incomes
C)   providing a social safety net
D)   offering the opportunity to purchase social insuranceE) C) and D)
F) None of the above

Question 7

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3  Income)  - 10,000. If a family doesn't earn any income, how does the negative income tax affect it?

Accepted Answer

A)   It will receive an income subsidy of $1,000.
B)   It will receive an income subsidy of $3,000.
C)   It will receive an income subsidy of $10,000.
D)   It will not be affected at all, since the negative income tax requires a family to earn income.E) B) and C)
F) None of the above

Question 8

With which three demographic variables is poverty correlated?

Accepted Answer

race, age,...

Question 9

Since 1959 when the official data on the poverty rate began, the poverty rate was at its highest in

Accepted Answer

A)   1959.
B)   1968.
C)   1977.
D)   1986.E) A) and B)
F) B) and C)

Question 10

"Equality of opportunities is more important than equality of incomes." This statement would be most likely attributed to which political philosophy?

Accepted Answer

A)   utilitarianism
B)   liberalism
C)   libertarianism
D)   welfarismE) C) and D)
F) All of the above

Question 11

Suppose that Family A borrows money when its car breaks down and saves money when the wife receives a holiday bonus from her employer. Suppose that Family B borrows money to buy elaborate birthday presents for the children and spends the husband's holiday bonus on a vacation to Florida. Which of the following is correct?

Accepted Answer

A)   Both Family A's and Family B's spending habits suggest that they base their purchasing decisions on transitory income.
B)   Family A's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income. Family B's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income.
C)   Family A's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income. Family B's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income.
D)   Both Family A's and Family B's spending habits suggest that they base their purchasing decisions on permanent income.E) A) and D)
F) A) and B)

Question 12

Figure 20-3 
-Refer to Figure 20-3. In 1968, the percent of children under age 18 in poverty is

Accepted Answer

A)   higher than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 and over in poverty.
B)   higher than the percentage of adults aged 18 to 64 but is lower than the percentage of elderly aged 65 and over in poverty.
C)   lower than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 and over in poverty.
D)   lower than the percentage of adults aged 18 to 64 but is higher than the percentage of elderly aged 65 and over in poverty.E) A) and C)
F) B) and D)

Question 13

People can borrow and lend money to smooth out short term variations in income known as what kind of changes?

Accepted Answer

The answer of People can borrow and lend money to...

Question 14

The best government policy to reduce poverty is

Accepted Answer

A)   a minimum wage law because the resulting unemployment is small in comparison to the benefits to people it helps.
B)   an expanded welfare program because people must have an additional "need" such as small children or a disability.
C)   an in-kind transfer because it ensures that the poor receive what they need most such as food or shelter.
D)   not obvious. Government programs to reduce poverty have many advantages but also many disadvantages.E) B) and C)
F) A) and C)

Question 15

Supporters of raising the minimum wage argue that minimum-wage laws are

Accepted Answer

A)   a tax-free way to help the working poor. Businesses bear the burden of paying higher wages, not the government.
B)   better than the Earned Income Tax Credit (EIT
C)   in targeting the working poor. The EITC may benefit teenagers from middle-class families who work summer jobs at the minimum wage.
C)   better than in-kind transfers such as food stamps in providing food rather than unhealthy items such as drugs or alcohol.
D)   a way to increase employment of those likely to earn the minimum wage.E) A) and C)
F) None of the above

Question 16

Scenario 20-5
Suppose the government implemented a negative income tax and used the following formula to compute a family's
tax liability:
Taxes owed = (1/4 of income)  - $10,000
-Refer to Scenario 20-5. This negative income tax would guarantee what minimum level of income to every family?

Accepted Answer

A)   $5,000
B)   $10,000
C)   $15,000
D)   $25,000E) B) and D)
F) A) and D)

Question 17

Comparing the US to other countries ranked by inequality,

Accepted Answer

A)   the US has a less equal distribution of income than some countries, but a more equal distribution of income than others.
B)   the US has one of the most equal distributions of income.
C)   the US has one of the least equal distributions of income.
D)   the US has a more equal distribution of income than other economically advanced countries such as Japan, Germany, and France.E) A) and B)
F) A) and C)

Question 18

Table 20-3
The Distribution of Income in Edgerton
 
-Refer to Table 20-3. If the poverty rate is 26%, where is the poverty line in Edgerton?

Accepted Answer

A)   under $28,000
B)   between $28,000 and $43,999
C)   between $44,000 and $75,999
D)   between $76,000 and $87,999E) None of the above
F) A) and B)

Question 19

The elderly represent the largest demographic group in poverty.

Accepted Answer

A) True 
 B)False

Question 20

The utilitarian justification for redistributing income is based on the assumption of diminishing marginal utility.

Accepted Answer

A) True 
 B)False

Exam 20: Income Inequality and Poverty

"Equality of opportunities is more important than equality of incomes." This statement would be most likely attributed to which political philosophy?

Correct Answer
verified

In 2011, the top 20% of US families had more than times as much income as the bottom 20%.

Correct Answer
verified

Supporters of raising the minimum wage argue that minimum-wage laws are

Correct Answer
verified

Scenario 20-5 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/4 of income) - $10,000 -Refer to Scenario 20-5. This negative income tax would guarantee what minimum level of income to every family?

Correct Answer
verified

People can borrow and lend money to smooth out short term variations in income known as what kind of changes?

Correct Answer
verified

Table 20-14 Income Inequality in the United States The values in the table reflect the percentages of pre-tax-and transfer income. Source: US Census Bureau -Refer to Table 20-14. The trend in income inequality from 1980 to 2010 is .

Correct Answer
verified

Since 1959 when the official data on the poverty rate began, the poverty rate was at its highest in

Correct Answer
verified

With which three demographic variables is poverty correlated?

Correct Answer
verified
race, age,...
View Answer

In 2011, the poverty rate in the United States was 15 percent. This means that 15 percent

Correct Answer
verified

Comparing the US to other countries ranked by inequality,

Correct Answer
verified

In general, which of the following would libertarians argue is more important than equal outcomes?

Correct Answer
verified

Table 20-3 The Distribution of Income in Edgerton -Refer to Table 20-3. If the poverty rate is 26%, where is the poverty line in Edgerton?

Correct Answer
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Correct Answer
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The best government policy to reduce poverty is

Correct Answer
verified

The elderly represent the largest demographic group in poverty.

Correct Answer
verified

Figure 20-3 -Refer to Figure 20-3. In 1968, the percent of children under age 18 in poverty is

Correct Answer
verified

Which political philosophy believes that the government should equalize the incomes of all members of society?

Correct Answer
verified

Economic mobility in the United States is

Correct Answer
verified

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000. If a family doesn't earn any income, how does the negative income tax affect it?

Correct Answer
verified

The utilitarian justification for redistributing income is based on the assumption of diminishing marginal utility.

Correct Answer
verified

Exam 20: Income Inequality and Poverty

"Equality of opportunities is more important than equality of incomes." This statement would be most likely attributed to which political philosophy?

Correct AnswerverifiedShow Answer

In 2011, the top 20% of US families had more than times as much income as the bottom 20%.

Correct AnswerverifiedShow Answer

Supporters of raising the minimum wage argue that minimum-wage laws are

Correct AnswerverifiedShow Answer

Scenario 20-5 Suppose the government implemented a negative income tax and used the following formula to compute a family's tax liability: Taxes owed = (1/4 of income) - $10,000 -Refer to Scenario 20-5. This negative income tax would guarantee what minimum level of income to every family?

Correct AnswerverifiedShow Answer

People can borrow and lend money to smooth out short term variations in income known as what kind of changes?

Correct AnswerverifiedShow Answer

Table 20-14 Income Inequality in the United States The values in the table reflect the percentages of pre-tax-and transfer income. Source: US Census Bureau -Refer to Table 20-14. The trend in income inequality from 1980 to 2010 is .

Correct AnswerverifiedShow Answer

Since 1959 when the official data on the poverty rate began, the poverty rate was at its highest in

Correct AnswerverifiedShow Answer

With which three demographic variables is poverty correlated?

Correct Answerverifiedrace, age,...View AnswerShow Answer

In 2011, the poverty rate in the United States was 15 percent. This means that 15 percent

Correct AnswerverifiedShow Answer

Comparing the US to other countries ranked by inequality,

Correct AnswerverifiedShow Answer

In general, which of the following would libertarians argue is more important than equal outcomes?

Correct AnswerverifiedShow Answer

Table 20-3 The Distribution of Income in Edgerton -Refer to Table 20-3. If the poverty rate is 26%, where is the poverty line in Edgerton?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The best government policy to reduce poverty is

Correct AnswerverifiedShow Answer

The elderly represent the largest demographic group in poverty.

Correct AnswerverifiedShow Answer

Figure 20-3 -Refer to Figure 20-3. In 1968, the percent of children under age 18 in poverty is

Correct AnswerverifiedShow Answer

Which political philosophy believes that the government should equalize the incomes of all members of society?

Correct AnswerverifiedShow Answer

Economic mobility in the United States is

Correct AnswerverifiedShow Answer

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000. If a family doesn't earn any income, how does the negative income tax affect it?

Correct AnswerverifiedShow Answer

The utilitarian justification for redistributing income is based on the assumption of diminishing marginal utility.

Correct AnswerverifiedShow Answer

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race, age,...
View Answer

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