Question 1

Which of the following contributes most to the reduction in income inequality?

Accepted Answer

A)  taxes
B)  wealth
C)  transfer payments
D)  earned-income tax creditsE) B) and D)
F) None of the above

Question 2

Income mobility

Accepted Answer

A)  makes lifetime income inequality among income receivers in the United States less than income inequality in any single year.
B)  is less in the United States than in most developing nations.
C)  refers to the movement of wage earners from one job to another.
D)  reduces the total percentage of households in the lowest quintile of the income distribution over time.E) A) and B)
F) A) and C)

Question 3

The average household income in the United States in 2014 was close to

Accepted Answer

A)  $35,000.
B)  $50,000.
C)  $70,000.
D)  $100,000.E) A) and B)
F) All of the above

Question 4

Discrimination

Accepted Answer

A)  affects the distribution of domestic output and income but not its total size.
B)  is shown as some point outside of an economy's production possibilities curve.
C)  places the economy at some point inside of its production possibilities curve.
D)  affects the total size of domestic output and income but not its distribution.E) C) and D)
F) A) and B)

Question 5

The crowding model of occupational discrimination suggests that occupational segregation results in

Accepted Answer

A)  a lower domestic output than would otherwise be the case.
B)  higher levels of total employment than would otherwise be the case.
C)  higher interest rates in the private sector than would otherwise be the case.
D)  a higher rate of inflation than would otherwise be the case.E) A) and B)
F) None of the above

Question 6

(Consider This)  The main problem with welfare cliffs is that they

Accepted Answer

A)  discourage welfare recipients from moving into higher paying jobs and ultimately becoming self-sufficient.
B)  cause dramatic increases in government spending at times when tax revenues are falling.
C)  occur randomly, further destabilizing the lives of recipients who are suddenly cut off.
D)  significantly increase the number of people receiving welfare.E) A) and B)
F) A) and C)

Question 7

An employer (biased against African Americans) whose discrimination coefficient is $5 will hire only whites if the actual African-American-white wage gap is
$7.

Accepted Answer

A) True 
 B)False

Question 8

Standard census data on the distribution of income

Accepted Answer

A)  take all taxes and transfer payments into account.
B)  are before taxes in that they do not account for personal income and payroll taxes.
C)  include noncash transfers.
D)  exclude cash transfers.E) B) and C)
F) B) and D)

Question 9

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

Question 10

Which of the following is an example of a noncash transfer that is typically not included in the income-distribution data?

Accepted Answer

A)  Social Security benefits
B)  welfare assistance
C)  unemployment compensation
D)  MedicareE) B) and C)
F) None of the above

Question 11

The Lorenz curve is a graph that relates income to household spending.

Accepted Answer

A) True 
 B)False

Question 12

In 2014, the portion of the U.S.population that lived in poverty was

Accepted Answer

A)  about 1 percent.
B)  about 5 percent.
C)  about 15 percent.
D)  about 25 percent.E) B) and C)
F) A) and B)

Question 13

(Last Word)  Median wealth in the United States in 2013

Accepted Answer

A)  was about the same as in 1995.
B)  had grown by about 8 percent since 1995.
C)  was about $76,000.
D)  was about $84,000.E) None of the above
F) B) and C)

Question 14

Since its inception in 1996, the Temporary Assistance for Needy Families (TANF)  program has

Accepted Answer

A)  increased, rather than reduced, the number of people on welfare.
B)  reduced the number of people on welfare by more than one-half.
C)  aided the poor by automatically increasing welfare payments when inflation occurs.
D)  greatly increased the unemployment rate.E) C) and D)
F) B) and D)

Question 15

The standard data on income distribution do not include the value of noncash transfers as income.

Accepted Answer

A) True 
 B)False

Question 16

An implication of the taste-for-discrimination model is that

Accepted Answer

A)  discrimination can lower a firm's production costs.
B)  discrimination will move a firm along its declining average total cost curve.
C)  other things equal, nondiscriminating firms will have lower production costs than discriminating firms.
D)  other things equal, discriminating firms will have lower production costs than nondiscriminating firms.E) A) and D)
F) A) and B)

Question 17

Which of the following Gini ratios indicates the lowest degree of income inequality?

Accepted Answer

A)  0.71
B)  0.55
C)  0.31
D)  0.45E) A) and B)
F) B) and C)

Question 18

The poverty rate in the United States was

Accepted Answer

A)  12 percent in 2014.
B)  higher in 2014 than in 1960.
C)  about the same in 2014 as in 1993.
D)  nearly 20 percent in 2014.E) None of the above
F) All of the above

Question 19

Which of the following groups has the lowest poverty rate?

Accepted Answer

A)  married-couple families
B)  whites
C)  foreign-born (not citizens) 
D)  AsiansE) B) and C)
F) A) and D)

Question 20

The former food-stamp program is now the Supplemental Nutrition Assistance Program (SNAP)  and eligible households now receive

Accepted Answer

A)  vouchers for food purchases.
B)  specialized debit cards that get monthly deposits of electronic money from the government.
C)  credit cards, and they forward the monthly bills to the government.
D)  cash payments.E) A) and C)
F) A) and B)

Exam 23: Income Inequality, Poverty, and Discrimination

The poverty rate in the United States was

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Entitlement programs include

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Which of the following groups has the lowest poverty rate?

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Standard census data on the distribution of income

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The crowding model of occupational discrimination suggests that occupational segregation results in

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Which of the following contributes most to the reduction in income inequality?

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The average household income in the United States in 2014 was close to

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An implication of the taste-for-discrimination model is that

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(Last Word) Median wealth in the United States in 2013

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An employer (biased against African Americans) whose discrimination coefficient is $5 will hire only whites if the actual African-American-white wage gap is $7.

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(Consider This) The main problem with welfare cliffs is that they

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Income mobility

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The former food-stamp program is now the Supplemental Nutrition Assistance Program (SNAP) and eligible households now receive

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Which of the following is an example of a noncash transfer that is typically not included in the income-distribution data?

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Since its inception in 1996, the Temporary Assistance for Needy Families (TANF) program has

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In 2014, the portion of the U.S.population that lived in poverty was

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The standard data on income distribution do not include the value of noncash transfers as income.

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Discrimination

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Which of the following Gini ratios indicates the lowest degree of income inequality?

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The Lorenz curve is a graph that relates income to household spending.

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