Question 1

What form of aid is used for Medicaid?

Accepted Answer

A)   Cash
B)   Charity
C)   Vouchers
D)   Subsidized servicesE) B) and C)
F) A) and D)

Question 2

The lower the benefit-reduction rate,the greater are the incentives to earn additional income.

Accepted Answer

A) True 
 B)False

Question 3

A Lorenz curve showing perfect equality in the distribution of income:

Accepted Answer

A)   coincides with the horizontal axis.
B)   coincides with the vertical axis.
C)   is a straight line with a 45-degree angle.
D)   is a curve bowed to the southwest.E) None of the above
F) B) and D)

Question 4

The Lorenz curve is a graph of the percentage of total income obtained by cumulative percentages of households.

Accepted Answer

A) True 
 B)False

Question 5

One main complaint about the official income thresholds for defining poverty is that they:

Accepted Answer

A)   are too variable for guiding government policy.
B)   depend too much on payments for rent and in-kind benefits.
C)   understate the standard of living by not considering consumption.
D)   are inadequate to meet basic needs in major metropolitan areas.E) A) and D)
F) All of the above

Question 6

Refer to the above graph,which shows four different Lorenz curves (I,II,III,and IV) .The greatest increase in income inequality would occur with a shift in a Lorenz curve from:

Accepted Answer

A)   II to III.
B)   II to IV.
C)   IV to III.
D)   IV to I.E) A) and C)
F) None of the above

Question 7

The greater the degree of inequality in the size distribution of income,the more bowed will be the Lorenz curve toward the:

Accepted Answer

A)   upper left-hand corner.
B)   upper right-hand corner.
C)   lower right-hand corner.
D)   lower left-hand corner.E) B) and D)
F) All of the above

Question 8

Refer to the above graph,which shows four different Lorenz curves (I,II,III,and IV) .The movement from point b to point e in the graph would indicate that:

Accepted Answer

A)   80 percent of households now receive 40 percent of income instead of 60 percent of households.
B)   80 percent of income goes to 40 percent of households instead of 60 percent of households.
C)   40 percent of income goes to 60 percent of households instead of 80 percent of households.
D)   60 percent of households now receive 20 percent instead of 60 percent of income.E) B) and D)
F) All of the above

Question 9

The Temporary Assistance to Needy Families program shifted responsibility for welfare from the federal government to the states.

Accepted Answer

A) True 
 B)False

Question 10

Those who favor inequality in the distribution of income contend that it will lead to stronger incentives to work,save,and invest,and thus to a greater national income and output.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following terms describes a system of subsidized health insurance available to those 65 and older?

Accepted Answer

A)   Medicare
B)   Supplemental Security Income (SSI) 
C)   Medicaid
D)   TANFE) B) and C)
F) A) and D)

Question 12

Which of the following provides retirement income to qualified retirees?

Accepted Answer

A)   Medicare
B)   Supplemental Security Income (SSI) 
C)   Social Security
D)   SNAPE) A) and C)
F) A) and B)

Question 13

Social Security is financed by a payroll tax on employees and employers.

Accepted Answer

A) True 
 B)False

Question 14

Government programs that pay benefits to those who are unable to earn income because of permanent disabilities or to those who have very low incomes are called:

Accepted Answer

A)   public assistance programs.
B)   social insurance programs.
C)   affirmative action programs.
D)   entitlement programs.E) None of the above
F) C) and D)

Question 15

Two major criticisms of the Bureau of Census data as a portrayal of the degree of income inequality are that the income concept employed is too:

Accepted Answer

A)   broad and the income accounting period is too short.
B)   narrow and the income accounting period is too long.
C)   narrow and the income accounting period is too short.
D)   broad and the income accounting period is too long.E) A) and B)
F) None of the above

Question 16

The Lorenz curve is a graph that shows the:

Accepted Answer

A)   distribution of wealth.
B)   degree of income inequality.
C)   effect of discrimination on incomes.
D)   trade-off between equality and efficiency.E) C) and D)
F) B) and D)

Question 17

The poverty rate in 2000 was:

Accepted Answer

A)   higher than in the previous decade.
B)   lower than in the previous decade.
C)   the same as in the previous decade.
D)   the same as it was in 1959.E) None of the above
F) A) and B)

Question 18

What form of aid is used for food stamps (SNAP) ?

Accepted Answer

A)   Cash
B)   Services
C)   Vouchers
D)   InsuranceE) A) and B)
F) B) and C)

Question 19

Which of the following helps finance the medical expenses of individuals receiving TANF or SSI?

Accepted Answer

A)   Medicare
B)   Supplemental Security Income (SSI) 
C)   Medicaid
D)   Social SecurityE) A) and B)
F) A) and C)

Question 20

The poverty rate increased dramatically during the 1960s but has been reduced significantly since then.

Accepted Answer

A) True 
 B)False

Exam 11: Income Inequality and Poverty

A Lorenz curve showing perfect equality in the distribution of income:

Correct AnswerverifiedShow Answer

Those who favor inequality in the distribution of income contend that it will lead to stronger incentives to work,save,and invest,and thus to a greater national income and output.

Correct AnswerverifiedShow Answer

Which of the following helps finance the medical expenses of individuals receiving TANF or SSI?

Correct AnswerverifiedShow Answer

The lower the benefit-reduction rate,the greater are the incentives to earn additional income.

Correct AnswerverifiedShow Answer

Government programs that pay benefits to those who are unable to earn income because of permanent disabilities or to those who have very low incomes are called:

Correct AnswerverifiedShow Answer

What form of aid is used for food stamps (SNAP) ?

Correct AnswerverifiedShow Answer

The Temporary Assistance to Needy Families program shifted responsibility for welfare from the federal government to the states.

Correct AnswerverifiedShow Answer

The Lorenz curve is a graph of the percentage of total income obtained by cumulative percentages of households.

Correct AnswerverifiedShow Answer

Two major criticisms of the Bureau of Census data as a portrayal of the degree of income inequality are that the income concept employed is too:

Correct AnswerverifiedShow Answer

Social Security is financed by a payroll tax on employees and employers.

Correct AnswerverifiedShow Answer

Which of the following provides retirement income to qualified retirees?

Correct AnswerverifiedShow Answer

Refer to the above graph,which shows four different Lorenz curves (I,II,III,and IV) .The greatest increase in income inequality would occur with a shift in a Lorenz curve from:

Correct AnswerverifiedShow Answer

The poverty rate increased dramatically during the 1960s but has been reduced significantly since then.

Correct AnswerverifiedShow Answer

Refer to the above graph,which shows four different Lorenz curves (I,II,III,and IV) .The movement from point b to point e in the graph would indicate that:

Correct AnswerverifiedShow Answer

The Lorenz curve is a graph that shows the:

Correct AnswerverifiedShow Answer

Which of the following terms describes a system of subsidized health insurance available to those 65 and older?

Correct AnswerverifiedShow Answer

One main complaint about the official income thresholds for defining poverty is that they:

Correct AnswerverifiedShow Answer

The poverty rate in 2000 was:

Correct AnswerverifiedShow Answer

What form of aid is used for Medicaid?

Correct AnswerverifiedShow Answer

The greater the degree of inequality in the size distribution of income,the more bowed will be the Lorenz curve toward the:

Correct AnswerverifiedShow Answer

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