Question 1

Economic mobility in the United States is

Accepted Answer

A)   great,so many of those below the poverty line are there only temporarily.
B)   rare,so most of those below the poverty line are there for decades.
C)   rare,yet many of those below the poverty line are there only temporarily.
D)   unrelated to poverty.E) All of the above
F) A) and C)

Question 2

If society chose to maximize total utility rather than minimum utility,

Accepted Answer

A)   society would achieve perfect income equality.
B)   society would achieve the maximin objective.
C)   its justice would be more utilitarian than Rawlsian.
D)   its justice would be more Rawlsian than utilitarian.E) All of the above
F) B) and C)

Question 3

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 some developing countries,such as Mexico and Brazil.E) A) and D)
F) B) and C)

Question 4

In-kind transfers are transfers to the poor

Accepted Answer

A)   in the form of goods and services rather than cash.
B)   in the form of goods,services,and cash.
C)   from private charitable organizations only.
D)   from the federal government only.E) A) and C)
F) All of the above A

Question 5

If in-kind transfers were included in income at their market value,what would happen to the number of families below the poverty line?

Accepted Answer

It would decrease by about 10%.

Question 6

Which of the following statements is not correct?

Accepted Answer

A)   An advantage of the Earned Income Tax Credit (EIT
C)  is that it targets the working poor better than the minimum wage because it does not benefit teenagers from middle-class families who work summer jobs at the minimum wage.
B)   A disadvantage of in-kind transfer programs such as food stamps is that they force recipients to purchase from a restricted set of items which may not include things that the poor need the most such as diapers or cleaning supplies.
C)   A disadvantage of minimum wage laws is that they are expensive for state and local governments to fund.
D)   Effective minimum wage laws create a surplus of labor.E) A) and C)
F) C) and D)

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Figure 20-5 o,and employment would rise above Qo. B)  above Wo,and employment would fall below Qo. C)  below Wo,and employment would rise above Qo. D)  below Wo,and employment would fall below Qo." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 20-5.An effective minimum wage would be set at a level

Accepted Answer

A)   above Wo,and employment would rise above Qo.
B)   above Wo,and employment would fall below Qo.
C)   below Wo,and employment would rise above Qo.
D)   below Wo,and employment would fall below Qo.E) C) and D)
F) A) and D)

Question 9

Table 20-1
The following table shows the distribution of income in Thomasville.
 
-Refer to Table 20-1.Seventy-five percent of all families have incomes above what level?

Accepted Answer

A)   $28,000
B)   $50,000
C)   $85,000
D)   There is insufficient information to answer this question.E) A) and C)
F) A) and B)

Question 10

An income distribution may not give an accurate picture of the standard of living for the poor because it does not include in-kind transfers.

Accepted Answer

A) True 
 B)False

Question 11

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

Accepted Answer

The answer of Economists Cox and Alm compared the gap...

Question 12

Among all countries in the world,the United States has the most income inequality.

Accepted Answer

A) True 
 B)False

Question 13

The maximin criterion suggests that social policy should

Accepted Answer

A)   expropriate the factors of production from the capitalist class.
B)   ensure an equal distribution of income.
C)   elevate the well-being of those at the bottom of the income distribution.
D)   elevate the well-being of all workers.E) B) and C)
F) C) and D)

Question 14

The economic life cycle describes how young people usually have higher savings rates than middle-aged people.

Accepted Answer

A) True 
 B)False

Question 15

The distribution of income for Grim is as follows:  If the poverty rate in Grim is 17 percent,what is the poverty line in Grim?

Accepted Answer

A)   $5,000.
B)   $10,000.
C)   $15,000.
D)   $20,000.E) A) and D)
F) B) and C)

Question 16

Saving and borrowing is indicative of a family that

Accepted Answer

A)   is most likely to be poor.
B)   has a difficult time balancing its standard of living.
C)   does not adjust its standard of living to reflect transitory changes in income.
D)   is most likely millionaires.E) A) and B)
F) B) and C)

Question 17

Economic mobility in the United States is so great that fewer than

Accepted Answer

A)   3 percent of families are poor for 8 or more years.
B)   5 percent of families are poor for 8 or more years.
C)   8 percent of families are poor for 8 or more years.
D)   10 percent of families are poor for 8 or more years.E) C) and D)
F) A) and C)

Question 18

Table 20-1
The following table shows the distribution of income in Thomasville.
 
-Refer to Table 20-1.Fifty percent of all families have incomes below what level?

Accepted Answer

A)   $28,000
B)   $50,000
C)   $85,000
D)   There is insufficient information to answer this question.E) A) and B)
F) A) and C)

Question 19

Measures of poverty that fail to account for the value of in-kind transfers

Accepted Answer

A)   understate the actual poverty rate.
B)   have little effect on the validity of reported poverty rates.
C)   are generally more reliable measures of actual poverty rates.
D)   overstate the actual poverty rate.E) All of the above
F) A) and B)

Question 20

Which of the following statements is not correct?

Accepted Answer

A)   The percentage of the population that suffers from long-term poverty is far smaller than the percentage of the population that suffers from short-term poverty because there is a high level of economic mobility in the United States.
B)   Permanent income is a better measure of a family's ability to buy the necessities of life than is transitory income.
C)   The economic life cycle theory explains why gifts of goods and services reduce poverty for the very young and the very old.
D)   Because people can borrow and save to smooth out changes in income,their standard of living in any one year depends more on lifetime income than on a particular year's income.E) A) and B)
F) A) and C) C

Exam 20: Income Inequality and Poverty

Economic mobility in the United States is

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If society chose to maximize total utility rather than minimum utility,

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Which of the following statements is correct?

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In-kind transfers are transfers to the poor

Correct AnswerverifiedA

If in-kind transfers were included in income at their market value,what would happen to the number of families below the poverty line?

Correct AnswerverifiedIt would decrease by about 10%.

Which of the following statements is not correct?

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

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Figure 20-5 -Refer to Figure 20-5.An effective minimum wage would be set at a level

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Table 20-1 The following table shows the distribution of income in Thomasville. -Refer to Table 20-1.Seventy-five percent of all families have incomes above what level?

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An income distribution may not give an accurate picture of the standard of living for the poor because it does not include in-kind transfers.

Correct AnswerverifiedShow Answer

Economists Cox and Alm compared the gap between rich and poor and found that the richest 20% was about 15 times better off than the poorest 20% when they compared what data?

Correct AnswerverifiedShow Answer

Among all countries in the world,the United States has the most income inequality.

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The maximin criterion suggests that social policy should

Correct AnswerverifiedShow Answer

The economic life cycle describes how young people usually have higher savings rates than middle-aged people.

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The distribution of income for Grim is as follows: If the poverty rate in Grim is 17 percent,what is the poverty line in Grim?

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Saving and borrowing is indicative of a family that

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Economic mobility in the United States is so great that fewer than

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Table 20-1 The following table shows the distribution of income in Thomasville. -Refer to Table 20-1.Fifty percent of all families have incomes below what level?

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Measures of poverty that fail to account for the value of in-kind transfers

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Which of the following statements is not correct?

Correct AnswerverifiedC

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A

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It would decrease by about 10%.

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C