Inequality, Poverty, And Discrimination Test Bank Chapter.18 - Macroeconomics v3.0 Complete Test Bank by LibRittenberg. DOCX document preview.
Chapter 18: Inequality, Poverty, and Discrimination
Multiple Choice
1. From 1968 to 2015, the share of income going to the rich has _______ and the share going to the poor has _______ .
A) risen; fallen
B) fallen; risen
C) stayed about the same; risen
D) risen; risen
Difficulty: Medium
2. Changes in the distribution of income in the United States over the past 40 years or so have brought to the forefront the issue of:
A) child labor.
B) early retirement income.
C) fairness.
D) credit card gouging.
Difficulty: Easy
3. Between 1968 and 2015, the Lorenz curve of the United States became:
A) a straight line.
B) closer to the 45-degree line.
C) more bowed out.
D) more bowed in.
Difficulty: Medium
4. Between 1968 and 2015, income inequality in the United States:
A) became greater.
B) became less unequal.
C) remained unchanged.
D) showed a dramatic increase in equality.
Difficulty: Medium
5. Between 1968 and 2015, the income group in the United States showing the greatest income gains was the _______ 20 percent.
A) bottom
B) third
C) fourth
D) top
Difficulty: Medium
6. The primary evidence of income inequality in the United States is provided by:
A) the IRS.
B) census data.
C) the Department of Agriculture.
D) research economists.
Difficulty: Medium
7. The _______ a Lorenz curve lies to (from) the 45-degree line, the _______ the distribution of income.
A) further; more equal
B) closer; less equal
C) further; more unequal
D) closer; better as far as economists are concerned.
Difficulty: Medium
Use the following to answer questions 8-13.
Exhibit: Income Distribution
8. (Exhibit: Income Distribution) Curve A represents:
A) a line of unequal income distribution.
B) a line of equal distribution of income.
C) a distribution of income where 20 percent of the families get 60 percent of the income, and 60 percent of the families get 20 percent of the income.
D) the ideal distribution of income, according to market economists.
Difficulty: Medium
9. (Exhibit: Income Distribution) Curve B:
A) is called a Lorenz curve.
B) shows that the lowest 20% of the families gets 60% of the income.
C) shows that 60 percent of the families get 40 percent of the income.
D) shows an equal distribution of income.
Difficulty: Medium
10. (Exhibit: Income Distribution) Curve B shows that the lowest quintile of families gets approximately _______ percent of the income.
A) 2-4
B) 7-10
C) 12-14
D) 17-19
Difficulty: Medium
11. (Exhibit: Income Distribution) Curve B shows that the fourth quintile of families gets approximately _______ percent of the income.
A) 20
B) 40
C) 60
D) 80
Difficulty: Hard
12. (Exhibit: Income Distribution) Curve B indicates that:
A) the lowest 60 percent of the families get 40 percent of the income.
B) the lowest 80 percent of the families get 40 percent of the income.
C) the lowest 80 percent of the families get 80 percent of the income.
D) income is quite equally distributed.
Difficulty: Medium
13. (Exhibit: Income Distribution) Curve _______ indicates that the lowest ________ percent of families would receive _______ of the income.
A) B; 40; 40
B) A; 60; 20
C) A; 40; 40
D) B; 80; 80
Difficulty: Hard
Use the following to answer questions 14-18.
Exhibit: Income Distribution in the United States
Quintile
1968 Income
Share
2010 Income
Share
Lowest 20%
4.2%
3.3%
Second 20%
11.1
8.5
Third 20%
17.5
14.6
Fourth 20%
24.5
23.4
Highest 20%
42.8
50.2
Top 5%
16.6
21.7
Income Distribution in the United States
14. (Exhibit: Income Distribution in the United States) In 2010, the lowest ________ percent of the families received _______ of the income.
A) 8.5; 20
B) 20; 20
C) 40; 11.8
D) 40; 8.5
Difficulty: Hard
15. (Exhibit: Income Distribution in the United States) Which of the following statements is true?
A) In 1968, the lowest 60 percent of the families received 17.5 percent of the income.
B) In 1968, the lowest 60 percent of the families received 32.8 of the income.
C) In 1968, the lowest 80 percent of the families received 24.5 percent of the income.
D) In 1968, the lowest 80 percent of the families received 23.2 percent of the income.
Difficulty: Hard
16. (Exhibit: Income Distribution in the United States) Which of the following statements is true?
A) For 1968, a point on the Lorenz curve would show the lowest 40 percent of the families receiving 15.3 percent of the income.
B) For 2010, a point on the Lorenz curve would show the lowest 80 percent of the families receiving 49.4 percent of the income.
C) For 1968, a point on the Lorenz curve would show the lowest 80 percent of the families receiving 24.5 percent of the income.
D) For 2010, the lowest 40 percent of the families received 8.9 percent of the income.
Difficulty: Hard
17. (Exhibit: Income Distribution in the United States) From 1968 to 2010, the distribution of income in the United States became:
A) more equal.
B) more unequal.
C) unmeasurable.
D) closer to the 45-degree line.
Difficulty: Medium
18. (Exhibit: Income Distribution in the United States) In 1968 and 2010, the lowest 40 percent of the families received _______ and _______ percent of the income, respectively.
A) 4.2; 3.3
B) 11.1; 8.5
C) 15.3; 11.8
D) None of the above are true.
Difficulty: Medium
19. When economists speak of the lowest 20 percent or the middle 20 percent of the families receiving a certain percentage of income, they are speaking of:
A) static groups.
B) families that move in and out of the various groups.
C) very immobile income classes.
D) a typical family of 4 with both parents present.
Difficulty: Medium
20. Studies of family income over time reveal that:
A) most people in the lowest quintile tend to stay there over their lifetimes.
B) income mobility is rare for all quintiles of the income distribution.
C) many people who move down the income ladder tend to be young.
D) many people who start out at the bottom of the income ladder when they are young move up the income ladder as they age.
Difficulty: Medium
21. If there is considerable _______ among the quintiles of the distribution of income in a country, then there would be many families moving from _______ and others moving from _______ quintiles.
A) immobility; lower to higher; higher to lower
B) mobility; higher to lower; lower to higher
C) immobility; lower to lower; higher to higher
D) stability; lower to higher; higher to higher
Difficulty: Medium
22. According to the text, it is generally agreed that in the United States in the first two decades following World War II:
A) income distribution in the United States became less equal.
B) income equality measures stayed the same.
C) income distribution became more equal.
D) there was no way to determine income distribution.
Difficulty: Medium
23. According to the text, it is generally agreed that in the United States since World War II, the distribution of income has:
A) become more equal.
B) become less equal.
C) stayed about the same.
D) changed first toward greater equality and then, after the late 1960s, toward greater inequality.
Difficulty: Medium
24. Since the late 1960s, a factor that is associated with the _______ in income _______ in the United States has been the _______ in the percentage of families headed by _______ .
A) decrease; inequality; increase; women.
B) increase; equality; increase; married couples
C) increase; inequality; increase; women
D) decrease; equality; increase; married couples
Difficulty: Medium
25. Since the late 1970s in the United States, the demand for _______ labor _______ and the demand for _______ labor _______ .
A) skilled; decreased; unskilled; increased
B) skilled; increased; unskilled; decreased
C) unskilled; stayed the same; skilled; increased
D) unskilled; increased; skilled; stayed the same
Difficulty: Medium
26. In the United States over the last couple of decades, the gap between the wages of skilled and unskilled workers:
A) increased.
B) decreased.
C) stayed the same.
D) increased and then decreased.
Difficulty: Medium
27. In the United States in the 1990s, and 2000s, the gap between the wages of college- and high-school-trained workers _______ and contributed to _______ .
A) narrowed; rising equality
B) widened; rising inequality
C) narrowed; decreasing inequality
D) widened; rising equality
Difficulty: Medium
28. Which of the following statements about the distribution of income in the United States is true?
A) Since 1967, the distribution of income has become more unequal.
B) Since 1967, the share of income going to the richest families has decreased.
C) Since 1967, the share of income going to the poorest families has risen.
D) The degree of inequality in the distribution of income remained stable between 1967 and 2015.
Difficulty: Medium
29. Which of the following has not been considered as a possible factor in increasing income inequality in the United States since the late 1960s?
A) changes in family structure
B) changes in tax policy
C) technological change
D) a reduction in the number of people attending college
Difficulty: Medium
30. A factor that has been associated with the increase in income inequality in the United States is the:
A) increase in households headed by single women.
B) reduction in the percentage of the population over the age of 65.
C) smaller gap between the wages of skilled and unskilled workers.
D) slowdown in technological change.
Difficulty: Medium
31. A factor that has been associated with the increase in income inequality in the United States is the:
A) decrease in households headed by single women.
B) reduction in the percentage of the population over the age of 65.
C) larger gap between the wages of skilled and unskilled workers.
D) slowdown in technological change.
Difficulty: Medium
32. A factor that has been associated with the increase in income inequality in the United States is the:
A) decrease in households headed by single women.
B) reduction in the percentage of the population over the age of 65.
C) smaller gap between the wages of skilled and unskilled workers.
D) way that technological change has affected labor demand.
Difficulty: Medium
33. The Case in Point titled “Attitudes and Inequality” suggested that:
A) more Americans than Europeans believe that the poor could become rich with enough hard work.
B) more Europeans than Americans believe that the poor could become rich with enough hard work.
C) the majority of both Americans and Europeans believe that the poor could become rich with enough hard work.
D) the majority of both Americans and Europeans believe that success is based on luck, connections, and corruption.
Difficulty: Medium
34. The annual income level that marks the dividing line between poor households and those that are not poor is the:
A) income line.
B) poverty line.
C) minimum-wage line.
D) relative income test.
Difficulty: Easy
35. The poverty line for a household with one person in 2015 was:
A) about $8,000.
B) between $12,000 and $13,000.
C) between $16,000 and $17,000.
D) between $22,000 and $23,000.
Difficulty: Medium
36. The poverty line for a household with nine people in 2015 was:
A) between $11,000 and $12,000.
B) between $16,000 and $17,000.
C) between $22,000 and $23,000.
D) over $49,000.
Difficulty: Medium
37. Relative poverty might be defined based on the:
A) ratio of food expenditures to housing expenditures.
B) ratio of housing expenditures to total expenditures.
C) relative proportion of income spent on food.
D) upper limit of income in the lowest one-fifth of the income distribution.
Difficulty: Medium
38. Setting a specific income level and then defining a person (or household) as poor if his or her (or its) income falls below that income level is called a(n):
A) means-tested test.
B) relative income test.
C) absolute income test.
D) nominal income test.
Difficulty: Easy
39. An income test devised to indicate poverty for those people whose incomes fall at the bottom of the income distribution is called a(n):
A) means-tested test.
B) relative income test.
C) absolute income test.
D) nominal income test.
Difficulty: Easy
40. If you establish the value of goods and services necessary to provide a minimum standard of living below which people are poor, you have come up with an income test that is called a(n):
A) means-tested test.
B) relative income test.
C) absolute income test.
D) nominal income test.
Difficulty: Easy
41. If you establish that a family is on the low end of the income scale and is thus considered poor, you have come up with a (n):
A) means-tested test.
B) relative income test
C) absolute income test
D) nominal income test.
Difficulty: Easy
42. The poverty line is described by which of the following?
A) It is a dollar figure. When a household income is equal to or less than this figure, the household is not considered to be poor.
B) It is a dollar figure above which a household's income is considered to be in the poor category.
C) In 2015 in the United States, the poverty line for a family of four was an income of about $24,000.
D) The poverty line is the same for all family sizes.
Difficulty: Medium
43. The percentage of the population that falls below the poverty line is called the:
A) poor rate.
B) poverty rate.
C) homeless rate.
D) absolute number of people in poverty.
Difficulty: Easy
44. The percentage of the population living in households whose income falls below the poverty line is the:
A) income distribution.
B) poverty rate.
C) wealth effect.
D) subsidy ratio.
Difficulty: Easy
45. The percentage of the U.S. population living in poverty in 2015 was:
A) less than 15 percent.
B) 20-24 percent.
C) 25-29 percent.
D) 30-35 percent.
E) greater than 35 percent.
Difficulty: Medium
46. Poverty, in large measure (and according to the authors of the text), is a(n) ________ concept.
A) worthless
B) absolute
C) relative
D) irrelevant
Difficulty: Medium
47. In the United States today, poor people have much ________ incomes than _______ .
A) higher; poor people in poor countries
B) lower incomes; poor people in America five years ago
C) higher; most Americans had five years ago
D) lower; the average person in less developed countries.
Difficulty: Medium
48. The total number of poor people in the United States in 2015 was about ________ million.
A) 10
B) 25
C) 32
D) 43
Difficulty: Medium
49. The characteristic most associated with poverty is:
A) age.
B) female-headed households with no husband present.
C) education level.
D) geographic location.
Difficulty: Medium
50. In 2015, approximately ________ percent of the families in the United States headed by ________ fell below the poverty line.
A) 2; women with no husband present
B) 5; married couple families
C) 47; unmarried males
D) 14; married couple families
Difficulty: Medium
51. In 2015, approximately ________ percent of the families in the United States headed by ________ fell below the poverty line.
A) 45; single men with no female present
B) 20; married couple families
C) 15; women with no husband present
D) 28; women with no husband present
Difficulty: Medium
52. The age group in the United States with the highest poverty rate is _______ years old.
A) under 18
B) 25-44
C) 35-44
D) 45-64
Difficulty: Medium
53. Which of the following demographic groups in the United States has the highest poverty rate?
A) married couple families
B) college graduates
C) non-Hispanic whites
D) People aged 18 to 64 who did not work at least a week
Difficulty: Medium
54. The poverty rate for whites (not Hispanic) in 2015 in the United States was approximately ________ percent.
A) 5
B) 8
C) 25
D) 45
Difficulty: Medium
55. The poverty rate for blacks in the United States in 2015 was about _______ percent.
A) 3
B) 7
C) 24
D) 40
Difficulty: Medium
56. The poverty rate for Hispanics of any race in the United States in 2015 was about _______ percent.
A) 3
B) 10
C) 22
D) 40
Difficulty: Medium
57. The benefits provided to the poor through Temporary Assistance for Needy Families are primarily in the form of:
A) education.
B) housing.
C) cash.
D) medical care.
Difficulty: Medium
58. The benefits provided to the poor through Head Start are primarily in the form of:
A) education.
B) housing.
C) cash.
D) medical care.
Difficulty: Medium
59. In 2015, approximately _______ percent of those counted as poor received food stamps.
A) 33
B) 48
C) 73
D) 93
Difficulty: Medium
60. In 2015, approximately _______ percent of people below the poverty line received some form of cash assistance.
A) 4
B) 10
C) 18
D) 54
Difficulty: Medium
61. A money payment that a recipient may spend as he or she wishes is:
A) the income effect.
B) the wealth effect.
C) noncash assistance.
D) cash assistance.
Difficulty: Easy
62. The provision of specific goods and services to poor people is:
A) the income effect.
B) the wealth effect.
C) noncash assistance.
D) cash assistance.
Difficulty: Easy
63. In general, cash assistance is _______ noncash assistance in the welfare and poverty alleviation programs in the United States.
A) significantly more than
B) slightly more than
C) slightly less than
D) significantly less than
Difficulty: Medium
64. According to consumer choice theory, poor people, from their own perspective, are better off with:
A) cash assistance than with noncash assistance.
B) noncash assistance than with cash assistance.
C) either cash assistance or noncash assistance.
D) neither cash assistance nor noncash assistance.
Difficulty: Medium
65. For the most part, poverty programs are funded by _______ government(s).
A) state
B) the federal
C) municipal
D) a combination of state and local
Difficulty: Easy
66. The text concludes that poor people, from their own perspective, would be better off with _______ than with _______ .
A) noncash aid; cash grants
B) TANF; cash grants
C) cash grants; noncash aid
D) welfare payments; social security
Difficulty: Medium
67. In determining the official poverty rate in the United States:
A) only cash income is counted.
B) cash and noncash income are counted.
C) cash, food stamps, and TANF payments are all that is counted.
D) food and medical care are counted.
Difficulty: Medium
68. Which of the following statements is true?
A) Noncash benefits provide more satisfaction to recipients than an equal level of cash benefits.
B) An equal level of cash benefits and noncash benefits provide recipients with the same level of satisfaction.
C) Cash benefits provide more satisfaction to recipients than an equal level of noncash benefits.
D) Most welfare aid in the United States is in the form of cash payments.
Difficulty: Medium
69. One explanation for why the poor tend to receive more noncash assistance than cash assistance is that:
A) the poor are better off with noncash assistance.
B) the poor prefer to receive noncash assistance.
C) taxpayers prefer to give noncash assistance.
D) those who supply noncash services have less political power than the poor.
Difficulty: Medium
70. One explanation for why the poor tend to receive more noncash assistance than cash assistance is that:
A) the poor are better off with noncash assistance.
B) the poor prefer to receive noncash assistance.
C) taxpayers prefer to give cash assistance.
D) those who supply noncash services have more political power than the poor.
Difficulty: Medium
71. After adjusting for noncash aid, the poverty rate in the United States is:
A) unchanged.
B) higher.
C) lower.
D) in some regions lower, but in most regions higher.
Difficulty: Medium
72. Reform to the welfare system in the United States in 1996:
A) defined a minimum period of eligibility.
B) gave states the power to design their own welfare programs.
C) increased noncash benefits after 2 years.
D) increased cash benefits after 2 years.
Difficulty: Medium
73. Reform to the welfare system in the United States in 1996:
A) defined a maximum period of eligibility.
B) gave states less scope in designing their own welfare programs.
C) increased noncash benefits after 2 years.
D) increased cash benefits after 2 years.
Difficulty: Medium
74. Reform to the welfare system in the United States in 1996 eliminated:
A) work requirements.
B) poverty.
C) noncash benefits.
D) the entitlement aspect of welfare.
Difficulty: Medium
75. Which of the following statements is true regarding welfare reform in 1996?
A) It was designed to move people out of welfare and into work.
B) It extended the years individuals could receive welfare.
C) It changed the poverty rate determination to include the value of noncash benefits.
D) It changed the entire process for calculating the poverty rate.
Difficulty: Medium
76. The Case in Point titled “Welfare Reform in Britain and the United States indicated that the program in _____ did not require recipients to obtain jobs and that the reduction in case loads was smaller in _____.
A) Britain; Britain
B) Britain; the United States
C) the United States; Britain
D) United States; the United States
Difficulty: Medium
77. Economists define discrimination as occurring when:
A) one person receives a lower income for doing an apparently similar job as another.
B) people with similar characteristics experience different economic outcomes because of sex, race, or other noneconomic characteristics.
C) a male professor receives a higher salary than a female professor.
D) people don't like others because of their sex or race.
Difficulty: Medium
78. When people with similar economic characteristics experience different economic outcomes because of their race, sex, or other noneconomic characteristics the result is:
A) uncertainty.
B) discrimination.
C) efficiency.
D) marginality.
Difficulty: Easy
79. The economist Gary Becker concluded that discrimination occurs because of people's:
A) preferences.
B) innate meanness.
C) lack of education.
D) greed.
Difficulty: Easy
Use the following to answer questions 80-83.
Exhibit: Discrimination Model
80. (Exhibit: Discrimination Model) If there is no discrimination in the market and blacks have the same demand and supply curves as whites, then the wage will be _______ and the quantity of labor hired will be _______ .
A) W1; L1
B) W; L1
C) W; L
D) W1; L
Difficulty: Hard
81. (Exhibit: Discrimination Model) If blacks and white have the same supply curve, but employers have discriminatory attitudes that cause them to assume a black worker is less productive, then the demand curve for blacks will be _______ and the wage for blacks will be _______ .
A) D; W1
B) D; W
C) D1; W1
D) D1; W
Difficulty: Hard
82. (Exhibit: Discrimination Model) If blacks and whites have the same supply curve, but employers have discriminatory attitudes that cause them to assume a black worker is less productive, the wage of whites will be _______ , the wage of blacks will be _______ , and the quantity hired of whites will be _______ .
A) W1; W; L1
B) W; W1; L
C) W1; W; L
D) W; W1 ; L1
Difficulty: Hard
83. (Exhibit: Discrimination Model) If blacks and whites have the same supply curve, but employers have discriminatory attitudes that cause them to assume a black worker is less productive, the wage of whites will be _______ , the quantity of whites hired will be ________ , the wage of blacks will be _______ , and the quantity of blacks hired will be ________ .
A) W; L; W1; L1
B) W; L1; W; L1
C) W1; L1; W; L
D) W1; L; W; L1
Difficulty: Hard
Use the following to answer questions 84-87.
Exhibit: Discrimination
84. (Exhibit: Discrimination) If blacks and whites have the same supply curve S, while blacks have demand curve D and whites have demand curve D', the wage rate for blacks will be given by:
A) J.
B) K.
C) J + K.
D) J - K.
Difficulty: Hard
85. (Exhibit: Discrimination) If blacks and whites have the same supply curve S, while blacks have demand curve D and whites have demand curve D', the wage for whites will be given by:
A) J.
B) K.
C) J + K.
D) J - K.
Difficulty: Hard
86. (Exhibit: Discrimination) If blacks and whites have the same supply curve S, while blacks have demand curve D and whites have demand curve D', employment for blacks will be given by:
A) L - M.
B) L + M.
C) L.
D) M.
Difficulty: Hard
87. (Exhibit: Discrimination) If blacks and whites have the same supply curve S, while blacks have demand curve D and whites have demand curve D', employment for whites will be given by:
A) L - M.
B) L + M.
C) L.
D) M.
Difficulty: Hard
88. All of the following are possible sources of discrimination against black workers EXCEPT:
A) white workers prefer not to work with black workers.
B) employers prefer not to hire black workers.
C) black workers prefer to work with white workers.
D) consumers do not want to buy from black employees.
Difficulty: Medium
89. If blacks are discriminated against in the labor market relative to whites, then the wage paid to blacks will be _______ whites and the number of blacks employed will be ______ whites, all other things equal.
A) lower than; lower than
B) higher than; lower than
C) higher than; higher than
D) lower than; higher than
Difficulty: Medium
90. If discrimination against blacks in the labor market is eliminated, then the wage paid to blacks will _______ and the number of blacks employed will _______ .
A) increase; increase
B) decrease; decrease
C) increase; remain unchanged
D) remain unchanged; increase
Difficulty: Medium
91. Which of the following is (are) examples of discriminatory practices?
A) Some groups experience lower wages.
B) Some groups experience fewer employment opportunities.
C) Some groups pay higher prices than others.
D) All of the above are examples of discriminatory practices.
Difficulty: Medium
92. To the extent that labor market discrimination exists in a country:
A) the country will not be allocating resources efficiently.
B) the country will be operating on its production possibilities curve.
C) the country will be operating beyond its production possibilities curve.
D) None of the above are true.
Difficulty: Medium
93. Which of the following statements is true?
A) Discrimination can reduce the perceived marginal revenue products of some groups of workers and thus lower their wage.
B) Over the last fifty years, there was no reduction in the gap between white male wages and black male wages.
C) The average wage of black females has risen to about 85 percent of the average wage of white males.
D) The gap between the earnings of black women and white males is smaller than the earnings gap between black males and white males.
Difficulty: Medium
94. Suppose that racism and sexism don't exist on the customer side of perfectly competitive markets. Then, according to the text, competition among profit-maximizing firms:
A) would not eliminate racism or sexism on the part of employers from the market.
B) would eliminate sexism but not racism on the part of employers from the market.
C) would eliminate both racism and sexism on the part of employers from the market.
D) has nothing to do with discrimination.
Difficulty: Medium
95. Which of the following statements is true?
A) Federal legislation encourages gender-based discrimination.
B) Affirmative action programs are designed to prevent minority groups from exploiting race-based opportunities.
C) Wage gaps between women, on the one hand, and white males, on the other hand, have fallen since the 1970s.
D) Wage gaps between males and females have widened since 1970.
Difficulty: Medium
96. Much of the recently declining wage gap between white males and blacks and women is due to _______ blacks and women, but some of the decline is due to _______ .
A) the increase in labor-market participation by; the decrease in market competition
B) the acquisition of human capital by; a decrease in discrimination
C) the elimination of affirmative action for most; increased market activity
D) an increase in discrimination against; a reduction in discrimination against religious workers
Difficulty: Hard
97. According to the text, a number of studies have concluded that black male workers earn about ________ percent less than white males due to labor-market discrimination.
A) 5
B) 15
C) 30
D) 50
Difficulty: Medium
98. Affirmative action attempts to eliminate discrimination by:
A) subsidizing the wages of specific groups of labor.
B) decreasing the supply of specific groups of labor.
C) increasing the demand for specific groups of labor.
D) imposing heavy fines on employers who discriminate.
Difficulty: Medium
99. Research by Rob Grunewald and Art Rolnick, cited in the Case in Point on early intervention programs suggested that governments can better promote economic development by supporting early childhood programs rather than by:
A) replacing noncash assistance with cash assistance.
B) increasing class sizes at universities.
C) curtailing budgets and reducing deficits.
D) offering subsidies to new businesses or building sports stadiums.
Difficulty: Medium
True/False
1. Poverty can be defined either in absolute terms or in relative terms.
2. The poverty line is the same regardless of the number of members in a household.
3. Poverty tends to be more severe for the elderly over the age of 65 than for females who are the head of a household without husbands present.
4. People with more education tend to experience lower poverty rates.
5. In 2015, white female wages were about 80% of white male wages.
6. The primary source of cash payments to the poor in the United States is Temporary Assistance for Needy Families.
7. Although poor people receive more cash assistance than noncash assistance, noncash assistance would tend to make them better off.
8. Recent proposals to reform welfare in the United States include work provisions and time limits on benefits.
9. Discrimination has been a major source of higher wages for blacks and other nonwhite minorities in the United States since the 1950s.
10. Discrimination in the work place can result from prejudices by employers, other employees, or consumers.
11. Much of the decrease in wage differentials between women and blacks vÌs a vÌs white males is due to the acquisition of human capital by women and blacks.
12. America's poverty rate is lower than that of most industrialized nations.
13. Over the last two decades, the share of income going to the rich has declined in the United States.
14. During the last two decades, the share of income going to the poor has declined in the United States.
15. The primary data on income inequality in the United States is provided by income tax returns.
16. Studies of income changes in the United States over time reveal that there is almost no income mobility among quintiles of the distribution of income.
17. In 2015, approximately 5 percent of the families headed by married couple families in the United States fell below the poverty line.
18. In 2015 in the United States, approximately 5 percent of the families headed by females with no husband present fell below the poverty line.
19. In the 1990s and early 2000s, the gap between the wages of skilled workers and unskilled workers in the United States decreased.
20. The distribution of income in the United States has become more equal since 1967.
21. Technological change in the United States over the last two decades has increased the demand for skilled labor and decreased the demand for unskilled labor.
22. Setting a specific income level and then defining a person as poor if his or her income falls below that level is called a relative income test.
23. An income test devised to indicate poverty for those people whose incomes fall at the bottom quintile of the income distribution list is called an absolute income test.
24. In some ways, poverty is an absolute concept, but more generally it is a relative one.
25. In 2015, the poverty line for a family of four in the United States was an income of about $24,000.
26. The percentage of the population that falls below the poverty line is called the poverty rate.
27. The characteristic most closely associated with poverty in the United States is age.
28. In 2015, only about 30 percent of the people below the poverty line in the United States received some form of assistance.
29. For the most part, poverty programs in the United States are funded by the federal government.
30. The text concludes that poor people are better off, from their own perspective, with noncash aid rather than cash grants.
31. In determining the poverty rate in the United States, only cash income is counted.
32. Most welfare assistance in the United States is in the form of cash payments.
33. If a female professor receives a higher salary than a male professor, this must be due to discrimination.
34. Gary Becker concluded that discrimination occurs because of people's preferences or attitudes.
35. Affirmative actions are designed to enhance minority opportunities.
36. Discrimination in an economy results in the economy operating inside its production possibilities curve.
37. If some employees have discriminatory attitudes against a group of workers, the demand for workers from that group may be lower.
Short Answer
1. Compare and contrast the issues involved in making choices between the uses of an absolute income test versus a relative income test for defining poverty.
2. Compare and contrast the issues involved in making a policy choice between the use of cash versus noncash assistance to alleviate poverty.
3. Discuss in some detail the factors that have contributed to the growing inequality in incomes in the United States in the past two decades.
4. What is a Lorenz curve? How can it be used to show the degree of inequality of income distribution? Given the data for Brazil shown, draw a Lorenz curve. Is the income distribution relatively equal or unequal? Explain how you reached your answer.
Brazil 2009 | |
Lowest Quintile | 2.9% |
Second Quintile | 7.1% |
Third Quintile | 12.4% |
Fourth Quintile | 19.0% |
Highest Quintile | 58.6% |