Question 1

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 B)
F) A) and C)

Question 2

Since 1975 the distribution of income has

Accepted Answer

A)   remained virtually constant from year to year.
B)   become more equal.
C)   varied considerably from year to year but in general has been stable.
D)   become less equal.E) A) and B)
F) B) and C)

Question 3

The term "growing income inequality" implies that the

Accepted Answer

A)   poor are getting poorer in both a relative and an absolute sense.
B)   Lorenz curve is shifting toward the diagonal.
C)   diagonal is shifting toward the Lorenz curve.
D)   upper quintiles of income receivers are getting relatively more of the total income than before and the lower quintiles are getting relatively less.E) C) and D)
F) B) and D)

Question 4

Which of the following measurement issues makes interpretation of U.S. poverty rates difficult?

Accepted Answer

A)   Poverty statistics measure income rather than consumption, and some families may be able to consume above the official poverty line.
B)   The high cost of living in rural areas tends to result in the understatement of poverty.
C)   Most people below the poverty line have substantial unreported income.
D)   The poverty rate is adjusted for every urban and rural area, so people's poverty status changes whenever they move.E) B) and D)
F) B) and C)

Question 5

In the taste-for-discrimination model, a prejudiced employer who prefers white workers and who has a discrimination coefficient of $3/hour would still hire African-Americans if the market wage rate were $22/hour for white workers and $20/hour for African Americans.

Accepted Answer

A) True 
 B)False

Question 6

If there is a widespread bias against African-American workers, an increase in the collective discrimination coefficients of employers will

Accepted Answer

A)   reduce the African-American wage rate, increase African-American employment, and lower the actual African-American-white wage ratio.
B)   reduce the African-American wage rate, decrease African-American employment, and lower the actual African-American-white wage ratio.
C)   increase the African-American wage rate, increase African-American employment, and increase the actual African-American-white wage ratio.
D)   increase the African-American wage rate, reduce African-American employment, and increase the actual African-American-white wage ratio.E) A) and B)
F) A) and D)

Question 7

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) A) and D)
F) B) and D)

Question 8

In 2014, the average income for households in the United States was about

Accepted Answer

A)   68,426.
B)   $42,820.
C)   $56,610.
D)   $69,821.E) A) and B)
F) None of the above

Question 9

In a supply and demand model of the labor market for nonpreferred workers, a reduction in employer prejudice against nonpreferred workers will

Accepted Answer

A)   increase supply, raise the wage rate, and decrease the employment of these workers.
B)   decrease supply, lower the wage rate, and decrease employment of these workers.
C)   decrease demand, lower the wage rate, and decrease the employment of these workers.
D)   increase demand, raise the wage rate, and increase the employment of these workers.E) C) and D)
F) A) and B)

Question 10

When the distribution of income is adjusted for noncash transfers, the income distribution shows

Accepted Answer

A)   perfect equality.
B)   greater equality.
C)   greater inequality.
D)   little, if any, change.E) C) and D)
F) B) and C)

Question 11

The closer the Lorenz curve is to the diagonal, the greater is the degree of income inequality.

Accepted Answer

A) True 
 B)False

Question 12

Wealth in the United States is

Accepted Answer

A)   distributed in a way that reduces the degree of income inequality.
B)   more unequally distributed than is income.
C)   less unequally distributed than is income.
D)   distributed in a way that has no effect on income inequality.E) None of the above
F) All of the above

Question 13

Which of the following is not a social insurance program?

Accepted Answer

A)   TANF (Temporary Assistance for Needy Families) 
B)   Medicaid
C)   Supplemental Security Income
D)   unemployment compensationE) A) and B)
F) A) and C)

Question 14

The TANF program

Accepted Answer

A)   is a form of social insurance.
B)   has been found to be unconstitutional by the Supreme Court.
C)   limits total lifetime welfare benefits to 5 years and requires able-bodied adults to work after receiving benefits for 2 years.
D)   perpetuates the so-called culture of poverty.E) A) and C)
F) B) and D)

Question 15

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $5,000, $2,500, $1,250, $750, and $500, respectively. What percentage of total income is received by the lowest 60 percent of the income receivers in population A?

Accepted Answer

A)   60
B)   50
C)   25
D)   20E) A) and C)
F) A) and D)

Question 16

In the U.S., the percentage of total population living in poverty fell significantly during which of the following periods?

Accepted Answer

A)   1959-1969
B)   1969-1979
C)   2001-2004
D)   2008-2011E) A) and B)
F) A) and C)

Question 17

Which of the following Gini ratios would indicate the least amount of income inequality?

Accepted Answer

A)   0.20
B)   0.40
C)   0.60
D)   0.80E) B) and D)
F) C) and D)

Question 18

Census data indicate that, as of 2014, the top fifth of all households receive about times as much income as the bottom fifth.

Accepted Answer

A)   sixteen
B)   twelve
C)   eight
D)   threeE) A) and D)
F) None of the above

Question 19

Which of the following would be considered part of wealth?

Accepted Answer

A)   wages and salaries
B)   rental payments
C)   profits from a corporation
D)   corporate stock holdingsE) A) and B)
F) A) and C)

Question 20

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) B) and C)

Exam 23: Income Inequality, Poverty, and Discrimination

The term "growing income inequality" implies that the

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If there is a widespread bias against African-American workers, an increase in the collective discrimination coefficients of employers will

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Which of the following Gini ratios would indicate the least amount of income inequality?

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

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Wealth in the United States is

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Which of the following measurement issues makes interpretation of U.S. poverty rates difficult?

Correct AnswerverifiedShow Answer

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive annual incomes of $5,000, $2,500, $1,250, $750, and $500, respectively. What percentage of total income is received by the lowest 60 percent of the income receivers in population A?

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Which of the following would be considered part of wealth?

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The closer the Lorenz curve is to the diagonal, the greater is the degree of income inequality.

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When the distribution of income is adjusted for noncash transfers, the income distribution shows

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In a supply and demand model of the labor market for nonpreferred workers, a reduction in employer prejudice against nonpreferred workers will

Correct AnswerverifiedShow Answer

Which of the following is not a social insurance program?

Correct AnswerverifiedShow Answer

Census data indicate that, as of 2014, the top fifth of all households receive about times as much income as the bottom fifth.

Correct AnswerverifiedShow Answer

In 2014, the average income for households in the United States was about

Correct AnswerverifiedShow Answer

The TANF program

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The poverty rate in the United States was

Correct AnswerverifiedShow Answer

In the taste-for-discrimination model, a prejudiced employer who prefers white workers and who has a discrimination coefficient of $3/hour would still hire African-Americans if the market wage rate were $22/hour for white workers and $20/hour for African Americans.

Correct AnswerverifiedShow Answer

Since 1975 the distribution of income has

Correct AnswerverifiedShow Answer

In the U.S., the percentage of total population living in poverty fell significantly during which of the following periods?

Correct AnswerverifiedShow Answer

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