Question 1

From the economic point of view, discrimination

Accepted Answer

A)  no longer exists in the U.S.economy.
B)  results in an actual domestic output that is below potential domestic output.
C)  provides incentives for minority groups to work harder at their jobs.
D)  results in an actual output that is no different from potential domestic output, provided resources are fully employed.E) B) and D)
F) All of the above

Question 2

(Consider This)  According to The Economist magazine, growing income inequality is less of a concern because

Accepted Answer

A)  it is increasing at a decreasing rate.
B)  the poor have increasingly better access to goods and services once only available to the rich.
C)  poverty rates have fallen below 10 percent.
D)  government transfers eliminate virtually all consumption inequality.E) A) and B)
F) A) and C)

Question 3

After the implementation of TANF, the U.S.welfare rolls fell by more than one-half between 1996 and 2007.

Accepted Answer

A) True 
 B)False

Question 4

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) None of the above
F) A) and C)

Question 5

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) A) and B)
F) C) and D)

Question 6

The following groups in the U.S.all had higher-than-the-national-average poverty rates in 2014, except

Accepted Answer

A)  households headed by females.
B)  foreign-born noncitizens.
C)  persons 65 or older.
D)  Hispanics.E) B) and D)
F) A) and B)

Question 7

Earnings received from wealth

Accepted Answer

A)  contribute to income inequality.
B)  are the major source of income for families.
C)  are becoming more equal in the society.
D)  are primarily the result of advanced education.E) A) and B)
F) A) and C)

Question 8

In the taste-for-discrimination model, an increase in the prejudice of employers will decrease the demand for African-American workers, lower the African- American wage rate, and lower the ratio of African-American to white wages.

Accepted Answer

A) True 
 B)False

Question 9

Based on annual before-tax incomes data from the Bureau of Census, about what percentage of U.S.households had annual incomes of $100,000 or more in 2014?

Accepted Answer

A)  5 percent
B)  10 percent
C)  25 percent
D)  33 percentE) All of the above
F) B) and C)

Question 10

Which of the following measurement issues makes interpretation of U.S.poverty rates difficult?

Accepted Answer

A)  Poverty statistics measure income rather than consumption, and some families may be able to consume above the official poverty line.
B)  The high cost of living in rural areas tends to result in the understatement of poverty.
C)  Most people below the poverty line have substantial unreported income.
D)  The poverty rate is adjusted for every urban and rural area, so people's poverty status changes whenever they move.E) B) and C)
F) A) and D)

Question 11

Which of the following is not one of the causes of the unequal distribution of income in the United States?

Accepted Answer

A)  ability differences
B)  education and training
C)  job preferences and job risks
D)  income taxes and transfersE) C) and D)
F) All of the above

Question 12

Suppose that Jane earns $10,000 in year 1 and $15,000 in year 2, while Jim earns $15,000 in year 1 and $10,000 in year 2.Is there income equality for the two individuals?

Accepted Answer

A)  The annual data indicate equality, but the two-year data indicate inequality.
B)  The annual data indicate inequality, but the two-year data indicate equality.
C)  Both the annual and the two-year data indicate equality.
D)  Both the annual and the two-year data indicate inequality.E) A) and C)
F) A) and D)

Question 13

If a prejudiced white employer behaves as if there is a disutility from hiring an African-American worker, then this disutility is measured by the

Accepted Answer

A)  employment coefficient.
B)  discrimination coefficient.
C)  occupational coefficient.
D)  affirmative action coefficient.E) All of the above
F) None of the above

Question 14

Census data indicate that, as of 2014, the top fifth of all households receive about times as much income as the bottom fifth.

Accepted Answer

A)  sixteen
B)  twelve
C)  eight
D)  threeE) A) and D)
F) A) and C)

Question 15

Which of the following is not a social insurance program?

Accepted Answer

A)  TANF (Temporary Assistance for Needy Families) 
B)  Medicaid
C)  Supplemental Security Income
D)  unemployment compensationE) A) and B)
F) A) and C)

Question 16

The distribution of household income in the United States becomes more unequal after taxes and transfer payments are taken into account.

Accepted Answer

A) True 
 B)False

Question 17

A reduction in the collective discrimination coefficients of employers will increase the wage rate of those discriminated against but reduce their employment.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is an example of statistical discrimination?

Accepted Answer

A)  An employer hires only white workers even though there are otherwise identical African-American workers available at lower pay.
B)  Female students in college business schools are overrepresented in human resource management courses and underrepresented in finance courses.
C)  A young woman who plans to work for only five to seven years after graduating college decides that getting an advanced degree "just won't pay off."
D)  A firm hires a man rather than a woman for a specific job because, on average, women have higher rates of absenteeism than do men.E) C) and D)
F) B) and C)

Question 19

Statistical discrimination refers to

Accepted Answer

A)  the crowding of women or minorities into low-paying occupations.
B)  significant differences in average levels of earnings by gender, race, and ethnicity, after accounting for nondiscriminatory factors.
C)  making individual hiring decisions on the basis of the characteristics of the group to which a person belongs, rather than on his or her personal characteristics and productivity.
D)  the 50-percent unexplained residual in studies that try to account for wage differences by gender, race, and ethnic origin.E) A) and B)
F) A) and C)

Question 20

The entrance of large numbers of "baby boomers" into the labor force in the 1970s and 1980s

Accepted Answer

A)  caused substantial reductions in permanent unemployment.
B)  lessened income inequality.
C)  increased income inequality.
D)  had no impact on income inequality.E) None of the above
F) B) and C)

Exam 23: Income Inequality, Poverty, and Discrimination

Census data indicate that, as of 2014, the top fifth of all households receive about times as much income as the bottom fifth.

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Statistical discrimination refers to

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The following groups in the U.S.all had higher-than-the-national-average poverty rates in 2014, except

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Which of the following is not one of the causes of the unequal distribution of income in the United States?

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From the economic point of view, discrimination

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Which of the following is not a social insurance program?

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A reduction in the collective discrimination coefficients of employers will increase the wage rate of those discriminated against but reduce their employment.

Correct AnswerverifiedShow Answer

If a prejudiced white employer behaves as if there is a disutility from hiring an African-American worker, then this disutility is measured by the

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Suppose that Jane earns $10,000 in year 1 and $15,000 in year 2, while Jim earns $15,000 in year 1 and $10,000 in year 2.Is there income equality for the two individuals?

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In the taste-for-discrimination model, an increase in the prejudice of employers will decrease the demand for African-American workers, lower the African- American wage rate, and lower the ratio of African-American to white wages.

Correct AnswerverifiedShow Answer

The distribution of household income in the United States becomes more unequal after taxes and transfer payments are taken into account.

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

Based on annual before-tax incomes data from the Bureau of Census, about what percentage of U.S.households had annual incomes of $100,000 or more in 2014?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following measurement issues makes interpretation of U.S.poverty rates difficult?

Correct AnswerverifiedShow Answer

Which of the following is an example of statistical discrimination?

Correct AnswerverifiedShow Answer

After the implementation of TANF, the U.S.welfare rolls fell by more than one-half between 1996 and 2007.

Correct AnswerverifiedShow Answer

The entrance of large numbers of "baby boomers" into the labor force in the 1970s and 1980s

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Earnings received from wealth

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(Consider This) According to The Economist magazine, growing income inequality is less of a concern because

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