Question 1

Despite continued growth in average income since the early 1970s, the poverty rate has not declined below the level reached in 1973.

Accepted Answer

A) True 
 B)False

Question 2

"The government should choose policies to maximize the total utility of society." This statement is most closely associated with which political philosophy?

Accepted Answer

A)   liberalism
B)   utilitarianism
C)   libertarianism
D)   welfarismE) None of the above
F) A) and B)

Question 3

Figure 20-3 
-Refer to Figure 20-3. In 1968, the percent of elderly aged 65 and over in poverty is

Accepted Answer

A)   higher than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty.
B)   higher than the percentage of adults aged 18 to 64 but is lower than the percentage of children under age 18 in poverty.
C)   lower than both the percentage of adults aged 18 to 64 and the percentage of children under age 18 in poverty.
D)   is lower than the percentage of adults aged 18 to 64 but is higher than the percentage of children under age 18 in poverty.E) B) and C)
F) None of the above

Question 4

For which of the following programs can a person qualify solely by having a low income?

Accepted Answer

A)   both Temporary Assistance for Needy Families (TANF)  and Supplemental Security Income (SSI) 
B)   Temporary Assistance for Needy Families (TANF)  but not Supplemental Security Income (SSI) 
C)   Supplemental Security Income (SSI)  but not Temporary Assistance for Needy Families (TANF) 
D)   neither Temporary Assistance for Needy Families (TANF)  nor Supplemental Security Income (SSI) E) A) and D)
F) A) and B)

Question 5

Which of the following is not an example of a welfare program?

Accepted Answer

A)   Supplemental Security Income (SSI) 
B)   Temporary Assistance for Needy Families (TANF) 
C)   food stamps
D)   minimum wage lawsE) A) and C)
F) A) and D)

Question 6

The 2011 U.S. distribution of income shows that the top 20 percent of families have approximately what share of income?

Accepted Answer

A)   20 percent
B)   35 percent
C)   50 percent
D)   80 percentE) C) and D)
F) B) and C)

Question 7

Briefly describe the three prominent schools of thought in political philosophy. Identify one of the most well-known philosophers in each school.

Accepted Answer

According to utilitarianism, the governm...

Question 8

Given the table shown, which country has a more equal income distribution? Explain your answer.

Accepted Answer

Country A has a more equal income distri...

Question 9

Miguel is a 20 year old college student who works part-time and earns an annual income of $12,000. To smooth out his life cycle changes in income, Miguel can

Accepted Answer

A)   save his earnings to use when he is middle-aged.
B)   lend money to a friend to purchase a new car.
C)   borrow money to pay for college, which he will later repay when his income rises.
D)   attempt to pay for college from his current earnings.E) B) and C)
F) A) and C)

Question 10

Table 20-13
Distribution of Income in Imagination
 
-Refer to Table 20-13. If the poverty rate in Imagination is 10%, what is the poverty line?

Accepted Answer

The answer of Table 20-13
Distribution of Income in Imagination
 
-Refer...

Question 11

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

Accepted Answer

A)   $30,000
B)   $60,000
C)   $90,000
D)   There is insufficient information to answer this question.E) All of the above
F) C) and D)

Question 12

Scenario 20-7
Zooey is a single mother of two young children whose husband died in a tragic car accident. She earns $20,000 per year working as a cashier at a grocery store. The government uses a negative income tax system in which Taxes owed = (1/4 of income) - $15,000.
-Refer to Scenario 20-7. Zooey's friend Alfredo owes $0 in taxes. How much does he earn?

Accepted Answer

The answer of Scenario 20-7
Zooey is a single mother of...

Question 13

A negative income tax system would

Accepted Answer

A)   make taxes more regressive.
B)   sever the link between tax policy and income distribution.
C)   collect from high-income households and give transfers to low-income households.
D)   eliminate progressive tax rates.E) A) and B)
F) All of the above

Question 14

Table 20-4
  Source: U.S. Bureau of Census
-Refer to Table 20-4. In 2011, the bottom 60% of families have

Accepted Answer

A)   about 13% of total income in the U.S.
B)   about 28% of total income in the U.S.
C)   about 51% of total income in the U.S.
D)   about 74% of total income in the U.S.E) A) and B)
F) A) and C)

Question 15

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $150,000 owe?

Accepted Answer

A)   $34,000
B)   $42,000
C)   $50,000
D)   $68,000E) A) and B)
F) None of the above

Question 16

The study by economists Cox and Alm found that the 2006 pre-tax income of the richest fifth of U.S. households is

Accepted Answer

A)   5 times the pre-tax income of the poorest fifth.
B)   10 times the pre-tax income of the poorest fifth.
C)   15 times the pre-tax income of the poorest fifth.
D)   20 times the pre-tax income of the poorest fifth.E) A) and B)
F) A) and C)

Question 17

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 developing countries, including Mexico and Brazil.E) All of the above
F) B) and C)

Question 18

Susan won $2,000 at the blackjack tables on her birthday. Her winnings are an example of

Accepted Answer

A)   permanent income.
B)   life-cycle income.
C)   transitory income.
D)   an in-kind transfer.E) A) and B)
F) A) and C)

Question 19

The United States has a more equal income distribution than many developing economies such as Mexico, South Africa, and Brazil.

Accepted Answer

A) True 
 B)False

Question 20

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) A) and B)
F) All of the above

Exam 20: Income Inequality and Poverty

Which of the following is not an example of a welfare program?

Correct Answer
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Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4. In 2011, the bottom 60% of families have

Correct Answer
verified

Susan won $2,000 at the blackjack tables on her birthday. Her winnings are an example of

Correct Answer
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For which of the following programs can a person qualify solely by having a low income?

Correct Answer
verified

The 2011 U.S. distribution of income shows that the top 20 percent of families have approximately what share of income?

Correct Answer
verified

The United States has a more equal income distribution than many developing economies such as Mexico, South Africa, and Brazil.

Correct Answer
verified

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

Correct Answer
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Figure 20-3 -Refer to Figure 20-3. In 1968, the percent of elderly aged 65 and over in poverty is

Correct Answer
verified

Miguel is a 20 year old college student who works part-time and earns an annual income of $12,000. To smooth out his life cycle changes in income, Miguel can

Correct Answer
verified

"The government should choose policies to maximize the total utility of society." This statement is most closely associated with which political philosophy?

Correct Answer
verified

The study by economists Cox and Alm found that the 2006 pre-tax income of the richest fifth of U.S. households is

Correct Answer
verified

Despite continued growth in average income since the early 1970s, the poverty rate has not declined below the level reached in 1973.

Correct Answer
verified

Given the table shown, which country has a more equal income distribution? Explain your answer.

Correct Answer
verified
Country A has a more equal income distri...
View Answer

Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. If the poverty rate in Imagination is 10%, what is the poverty line?

Correct Answer
verified

A negative income tax system would

Correct Answer
verified

Briefly describe the three prominent schools of thought in political philosophy. Identify one of the most well-known philosophers in each school.

Correct Answer
verified
According to utilitarianism, the governm...
View Answer

Which of the following statements is correct?

Correct Answer
verified

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

Correct Answer
verified

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $150,000 owe?

Correct Answer
verified

Exam 20: Income Inequality and Poverty

Which of the following is not an example of a welfare program?

Correct AnswerverifiedShow Answer

Table 20-4 Source: U.S. Bureau of Census -Refer to Table 20-4. In 2011, the bottom 60% of families have

Correct AnswerverifiedShow Answer

Susan won $2,000 at the blackjack tables on her birthday. Her winnings are an example of

Correct AnswerverifiedShow Answer

For which of the following programs can a person qualify solely by having a low income?

Correct AnswerverifiedShow Answer

The 2011 U.S. distribution of income shows that the top 20 percent of families have approximately what share of income?

Correct AnswerverifiedShow Answer

The United States has a more equal income distribution than many developing economies such as Mexico, South Africa, and Brazil.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 20-3 -Refer to Figure 20-3. In 1968, the percent of elderly aged 65 and over in poverty is

Correct AnswerverifiedShow Answer

Miguel is a 20 year old college student who works part-time and earns an annual income of $12,000. To smooth out his life cycle changes in income, Miguel can

Correct AnswerverifiedShow Answer

"The government should choose policies to maximize the total utility of society." This statement is most closely associated with which political philosophy?

Correct AnswerverifiedShow Answer

The study by economists Cox and Alm found that the 2006 pre-tax income of the richest fifth of U.S. households is

Correct AnswerverifiedShow Answer

Despite continued growth in average income since the early 1970s, the poverty rate has not declined below the level reached in 1973.

Correct AnswerverifiedShow Answer

Given the table shown, which country has a more equal income distribution? Explain your answer.

Correct AnswerverifiedCountry A has a more equal income distri...View AnswerShow Answer

Table 20-13 Distribution of Income in Imagination -Refer to Table 20-13. If the poverty rate in Imagination is 10%, what is the poverty line?

Correct AnswerverifiedShow Answer

A negative income tax system would

Correct AnswerverifiedShow Answer

Briefly describe the three prominent schools of thought in political philosophy. Identify one of the most well-known philosophers in each school.

Correct AnswerverifiedAccording to utilitarianism, the governm...View AnswerShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000. How much would a family that earned $150,000 owe?

Correct AnswerverifiedShow Answer

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Country A has a more equal income distri...
View Answer

Correct Answer
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According to utilitarianism, the governm...
View Answer

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