Question 1

If the U.S.government determines that the cost of feeding an urban family of six is $6,000 per year,then the official poverty line for a family of that type is

Accepted Answer

A)   $6,000.
B)   $12,000.
C)   $18,000.
D)   $36,000.E) All of the above
F) B) and D)

Question 2

In the United States,labor earnings are what percent of total income?

Accepted Answer

A)   75 percent
B)   70 percent
C)   65 percent
D)   50 percentE) None of the above
F) B) and D)

Question 3

The federal government sets the poverty line at roughly

Accepted Answer

A)   five times the cost of providing an adequate diet.
B)   four times the cost of providing an adequate diet.
C)   three times the cost of providing an adequate diet.
D)   two times the cost of providing an adequate diet.E) B) and C)
F) A) and D)

Question 4

The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

Accepted Answer

A)   In-kind transfers.
B)   Economic life cycle.
C)   Transitory versus permanent income.
D)   Economic mobility.E) A) and D)
F) B) and C)

Question 5

When the government taxes income as part of a redistribution program,

Accepted Answer

A)   the poor pay higher taxes.
B)   the rich always benefit more than the poor.
C)   the poor are encouraged to work.
D)   incentives to earn income are diminished.E) None of the above
F) A) and B)

Question 6

Measuring poverty using an absolute income scale like the poverty line can be misleading because

Accepted Answer

A)   income measures do not include the value of in-kind transfers.
B)   money is more highly valued by the poor than by the rich.
C)   the poor are not likely to participate in the labor market.
D)   income measures are not adjusted for the effects of labor-market discrimination.E) All of the above
F) A) and B)

Question 7

"The government should punish crimes and enforce voluntary agreements but not redistribute income." This statement is most closely associated with which political philosophy?

Accepted Answer

A)   Liberalism.
B)   Utilitarianism.
C)   Libertarianism.
D)   Welfarism.E) All of the above
F) A) and B)

Question 8

The poverty rate is

Accepted Answer

A)   a measure of income inequality across families.
B)   the percentage of the population whose family income falls below a specified level.
C)   an absolute level of income set by the federal government for each family size.
D)   measured by the number of in-kind transfers that a family receives.E) None of the above
F) B) and C)

Question 9

In 2005,the poverty rate in the United States was 12.6 percent.This means that 12.6 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) A) and D)
F) All of the above

Question 10

If the U.S.government determines that the cost of feeding an urban family of four is $5,200 per year,then the official poverty line for a family of that type is

Accepted Answer

A)   $10,400.
B)   $15,600.
C)   $20,800.
D)   $26,000.E) None of the above
F) A) and B)

Question 11

In comparison to the average poverty rate,

Accepted Answer

A)   children and the elderly are more likely to be poor.
B)   children and the elderly are less likely to be poor.
C)   children are more likely to be poor,but the elderly are less likely to be poor.
D)   children are less likely to be poor,but the elderly are more likely to be poor.E) A) and B)
F) B) and C)

Question 12

When the government enacts policies to redistribute income,

Accepted Answer

A)   the objective is to enhance efficiency and a side effect is that the allocation of resources becomes more equal.
B)   the objective is to enhance efficiency and a side effect is that the allocation of resources becomes less equal.
C)   the objective is to enhance equality and a side effect is that the allocation of resources becomes more efficient.
D)   the objective is to enhance equality and a side effect is that the allocation of resources becomes less efficient.E) A) and B)
F) B) and C)

Question 13

Which of the following statements is not correct?

Accepted Answer

A)   The poverty line is an absolute level of income set by the federal government below which a family is considered to be in poverty.
B)   The poverty line is approximately equal to three times the cost of providing an adequate diet.
C)   The poverty line is adjusted annually to reflect changes in price levels.
D)   The poverty line is adjusted semiannually to reflect changes in fuel prices.E) A) and B)
F) None of the above

Question 14

About four out of five millionaires in the United States earned their money rather than inherited it.

Accepted Answer

A) True 
 B)False

Question 15

The United States has more income inequality than

Accepted Answer

A)   Brazil.
B)   Mexico.
C)   Canada.
D)   South Africa.E) B) and C)
F) A) and B)

Question 16

Which of the following groups has the highest poverty rate?

Accepted Answer

A)   Blacks.
B)   Asians.
C)   Children (under age 18) .
D)   Female-headed households.E) C) and D)
F) A) and B)

Question 17

What percentage of millionaires in the United States are self-made?

Accepted Answer

A)   20 percent
B)   40 percent
C)   60 percent
D)   80 percentE) B) and C)
F) A) and D)

Question 18

Table 20-4
Poverty Thresholds in 2002,by Size of Family and Number of Related Children Under 18 Years
[Dollars]
  Source: U.S.Bureau of the Census,Current Population Survey.
-Refer to Table 20-4.What is the poverty line for a 75 year old individual?

Accepted Answer

A)   $8,628
B)   $9,359
C)   $12,353
D)   $12,400E) All of the above
F) A) and B)

Question 19

Government programs that take money from high-income people and give it to low-income people typically

Accepted Answer

A)   improve economic efficiency by reducing poverty.
B)   reduce economic efficiency because they distort incentives.
C)   have no effect on economic efficiency because they both reduce poverty and distort incentives.
D)   sometimes improve,sometimes reduce,and sometimes have no effect on economic efficiency.E) B) and C)
F) A) and C)

Question 20

The 2005 U.S.distribution of income shows that the top 5 percent of families have approximately what share of income?

Accepted Answer

A)   1 percent
B)   5 percent
C)   10 percent
D)   20 percentE) A) and D)
F) All of the above

Exam 20: Income Inequality and Poverty

The federal government sets the poverty line at roughly

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The 2005 U.S.distribution of income shows that the top 5 percent of families have approximately what share of income?

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If the U.S.government determines that the cost of feeding an urban family of six is $6,000 per year,then the official poverty line for a family of that type is

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When the government taxes income as part of a redistribution program,

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Which of the following groups has the highest poverty rate?

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In 2005,the poverty rate in the United States was 12.6 percent.This means that 12.6 percent

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In the United States,labor earnings are what percent of total income?

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Government programs that take money from high-income people and give it to low-income people typically

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About four out of five millionaires in the United States earned their money rather than inherited it.

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Measuring poverty using an absolute income scale like the poverty line can be misleading because

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If the U.S.government determines that the cost of feeding an urban family of four is $5,200 per year,then the official poverty line for a family of that type is

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The poverty rate is

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The United States has more income inequality than

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"The government should punish crimes and enforce voluntary agreements but not redistribute income." This statement is most closely associated with which political philosophy?

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The statement that "measures of the distribution of income are based on money income" relates to which problem in measuring inequality?

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Which of the following statements is not correct?

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In comparison to the average poverty rate,

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What percentage of millionaires in the United States are self-made?

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When the government enacts policies to redistribute income,

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Table 20-4 Poverty Thresholds in 2002,by Size of Family and Number of Related Children Under 18 Years [Dollars] Source: U.S.Bureau of the Census,Current Population Survey. -Refer to Table 20-4.What is the poverty line for a 75 year old individual?

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