Deck 17: Income Distribution and Poverty

Question 1

The two biggest benefit programs aimed solely at the _____________ poor are and _____________.

Answer 1

Poor:
Poor can be defined as the lack of sufficient money to live a standard life in the society.
Food stamps can be defined as the voucher that is issued to those of low income and exchangeable for food. Food stamps is mainly provided to the poor.
Public assistance can be defined as the assistance that is provided by the government to the needy, disabled persons and to dependent children. Public assistance is mainly provided to the poor.
The two biggest benefit programs aimed solely at the poor are Food Stamps and Public Assistance.
Therefore, the answers that are to be filled in blanks are

Question 2

Circle the letter that corresponds to the best answer. More poor people live in _________ than in any other area of the United States.

A) cities
B) suburbs
C) smaller metropolitan areas
D) rural communities

Answer 2

Referring to table below:
16.4 million poor people lived in Suburbs, 13.4 million lived in cities, 8.6 million poor people lived in smaller metropolitan areas and 8.4 million poor people lived in rural communities. So, more poor people live in suburbs than in any other area of United States. So the right answer is option (b).

Question 3

Circle the letter that corresponds to the best answer. "The exodus of middle- and working-class families from many ghetto neighborhoods removes an important 'social buffer'" was said by _______.

A) Nicholas Lemann
B) Charles Murray
C) Barbara Ehrenreich
D) William Julius Wilson

Answer 3

Th statement "The exodus of middle- and working-class families from many ghetto neighborhoods removes an important 'social buffer'" was said by the person William Julius Wilson. He is an American sociologist.
Hence, options (a), (b) and (c) are not correct.
Therefore, the correct option is
.

Question 4

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) Although there are poor children in the United States, our child poverty problem is not nearly as bad as that of most other rich countries.
B) The reason so many people in poor countries still don't have safe drinking water is that it would cost at least $50 billion a year to provide it.
C) Poor people in the United States spend more than double their reported incomes.
D) Although some war veterans are poor, virtually none are homeless because of the efforts of the Veterans Administration to find them housing.

Question 5

Circle the letter that corresponds to the best answer. Which of the following people would stand the least chance of being poor during her or his lifetime?

A) someone with less than 12 years of education
B) someone with more than 12 years of education
C) someone white
D) someone black

Question 6

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) Although there are several theories of poverty, it is possible to formulate just one theory which completely explains 99 percent of all poverty in the United States.
B) There are at least a dozen theories of poverty, and each has at least some apparent validity.
C) Poverty can be explained largely by employment discrimination.
D) Poverty is no longer a major socioeconomic problem in the United States.

Question 7

What has happened to the welfare rolls since the mid-1990s? What are the causes of this trend?

Question 8

Circle the letter that corresponds to the best answer. Which statement is true?

A) Virtually none of the homeless have jobs.
B) Many homeless people are mentally ill.
C) The homeless are concentrated in a few large cities.
D) None of the above.

Question 9

Circle the letter that corresponds to the best answer. Which statement is true?

A) If we redistributed income every year so that everyone would get the same amount, this would hurt the efficiency of our economy.
B) Virtually everyone agrees that we should redistribute most of the income received by the rich to the poor.
C) The poor get a great deal more satisfaction from each additional dollar of income than the rich.
D) There is no relationship between the distribution of income and economic incentives.

Question 10

Circle the letter that corresponds to the best answer. Who would most likely be poor?

A) a person over 65
B) a black child
C) a Hispanic child
D) a college dropout

Question 11

Use Figure 1 to answer problems 1 through 4.
F igure 1

What is the percentage of income earned by the highest quintile on Lorenz curve Q?

Question 12

The richest quintile of humanity spends about _____________ times as much on consumption as the world's poorest quintile.

Question 13

Circle the letter that corresponds to the best answer. More than one out of every _________ children lives in poverty.

A) two
B) three
C) five
D) nine

Question 14

Circle the letter that corresponds to the best answer. The largest government program aimed exclusively at helping the poor is ___________.

A) the Earned Income Tax Credit
B) public assistance
C) food stamps
D) Social Security

Question 15

Circle the letter that corresponds to the best answer. The dividing line between the 1 percent and the 99 percent is an annual income of ___________.

A) $100,000
B) $400,000
C) $1 million
D) $5 million
E) $1 billion

Question 16

Discuss the basic determinants of income distribution.

Question 17

Circle the letter that corresponds to the best answer. Compared to their levels in 2003, the poverty line has ____________ and the minimum hourly wage has ___________.

A) gone up, gone up
B) stayed the same, stayed the same
C) gone up, stayed the same
D) stayed the same, gone up

Question 18

Circle the letter that corresponds to the best answer. Which one of the following has been the least effective antipoverty program _________?

A) the Welfare Reform Act of 1996
B) Social Security
C) food stamps
D) the Earned Income Tax Credit

Question 19

Circle the letter that corresponds to the best answer. Which of the following people would most likely experience at least a year of poverty after her or his 20th birthday?

A) a high school dropout
B) a black person
C) a white person
D) a college dropout

Question 20

More than one out of every _____________ black Americans is poor.

Question 21

Practical Application: What steps would you take to cut our poverty rate in half?

Question 22

Circle the letter that corresponds to the best answer. Which statement is false?

A) Poverty breeds poverty.
B) Poor people have low human capital.
C) The liberals and conservatives disagree on how to get people off the welfare rolls and into self-supporting jobs.
D) None of the above.

Question 23

Circle the letter that corresponds to the best answer. Which statement is true?

A) Most of the nation's poor receive welfare benefits.
B) Since the Welfare Reform Act of 1996, no new welfare cases have been accepted.
C) More people than ever are receiving welfare benefits.
D) Most single mothers who have recently left the welfare rolls remain poor.

Question 24

Circle the letter that corresponds to the best answer. The Darity-Myers thesis is an attempt to explain ________.

A) black poverty
B) the poverty of elderly persons
C) worldwide poverty
D) the permanent underclass

Question 25

Circle the letter that corresponds to the best answer. Compared to the average net worth of white families, the average net worth of black and Hispanic families is

A) less than one-tenth
B) about half
C) almost equal
D) somewhat larger

Question 26

Circle the letter that corresponds to the best answer. It would not be reasonable to say that poor people are ___________.

A) grudgingly tolerated by society's "productive" members
B) largely superfluous to our socioeconomic system
C) basically self-supporting
D) poor for a variety of reasons

Question 27

Circle the letter that corresponds to the best answer. Which statement is true?

A) Over 90 percent of the families receiving public assistance are headed by people who are employed.
B) Nearly 90 percent of those in the workforce earn at least $10 an hour.
C) The welfare rolls are much lower today than they were in 1994.
D) If every adult on welfare were willing to work, we could cut the number of welfare families by over 75 percent.

Question 28

Use Figure 1 to answer problems 1 through 4.
F igure 1

What is the percentage of income received by the highest quintile on line R?

Question 29

Practical Application: How many dollars and cents per hour would a person working a 40-hour week need to work to keep a family of four at the poverty line? (Hint: First find the amount of money the family would need per week to stay at the poverty line.)

Question 30

Circle the letter that corresponds to the best answer. Which statement is false?

A) The poor pay higher prices to buy groceries, furniture, and appliances.
B) Low-income families can pay over $500 more for the same car bought by a higher-income household.
C) The poor pay higher interest rates than people with higher incomes.
D) Very few poor people can claim the Earned Income Tax Credit.

Question 31

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) Our poverty rate is somewhat higher today than it was in 1999.
B) Our poverty rate is over 17 percent.
C) If it were not for the 2007-09 recession, our poverty rate would probably be below 10 percent.
D) Our poverty rate is currently at an all-time low.

Question 32

Who are the poor in the United States? A few population groups have very high incidences of poverty. Explain why people in each of these groups tend to be poor.

Question 33

Circle the letter that corresponds to the best answer. Each of the following is a major source of great wealth except ____________.

A) earning large salaries
B) starting up new companies
C) owning real estate
D) receiving an inheritance

Question 34

Circle the letter that corresponds to the best answer. The Earned Income Tax Credit is _______.

A) a form of welfare
B) a refund check paid to the working poor by the Internal Revenue Service
C) a very minor form of government aid to the poor
D) opposed by both liberals and conservatives

Question 35

Circle the letter that corresponds to the best answer. What would be the most effective way of raising people out of poverty?

A) Cut off welfare payments to every family with at least one adult member between the ages of 18 and 64.
B) Raise the minimum hourly wage.
C) Eliminate the Earned Income Tax Credit.
D) Have the government put welfare recipients to work at minimum wage jobs.

Question 36

About _____________ percent of all poor people are black.

Question 37

Web Activity: Are you eligible for the Earned Income Tax Credit? Find out at www.bankrate.com/calculators/tax-planning/earned-income-tax-creditcalculator.aspx.

Question 38

Circle the letter that corresponds to the best answer. The superrich get most of their income from ___________.

A) rent, interest, and profits
B) wages
C) illegal transactions
D) real estate investments

Question 39

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) Our nation provides cradle-to-grave security for our military personnel and their families.
B) Because of the relative high pay and benefits provided by the military, very few military families run into financial problems.
C) No military family lives below the poverty line.
D) Some military families depend on food pantries.

Question 40

Use Figure 1 to answer problems 1 through 4.
F igure 1

What is the percentage of income received by the middle three quintiles on line S?

Question 41

Circle the letter that corresponds to the best answer. Which is not aimed solely at the poor?

A) food stamps
B) public assistance
C) Social Security
D) Medicaid

Question 42

Circle the letter that corresponds to the best answer. The richest fifth of all American families receives __________ percent of our total income.

A) almost 35
B) about 50
C) more than 60
D) more than 75

Question 43

Circle the letter that corresponds to the best answer. Which is the most accurate statement about real median family income?

A) It has declined steadily over the last ten years.
B) It has fallen during nearly every recession since the 1960s.
C) It is about twice as high as it was in 1970.
D) It increased steadily since 2000.

Question 44

There are several theories of the causes of poverty. Why can't a single theory explain all the poverty in the United States?

Question 45

Web Activity: Do you want to be a billionaire? Aside from inheriting money, in which three industries or economic sectors have our 100 richest billionaires made their fortunes? Go to www.forbes.com/richlist.

Question 46

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) The standard of living of poor American children is very low compared to that of middle-class American children.
B) Poor children in the United States are much worse off than poor children in virtually all other OECD countries.
C) Poor children in the United States are much better off than poor children in virtually all other OECD countries.
D) There is no way to compare the degree of child poverty in the United States with the degree of child poverty in other economically advanced countries.

Question 47

Circle the letter that corresponds to the best answer. Which statement is the most accurate? (LO6)

A) Because of the efforts of the Veterans Administration, only a handful of veterans are homeless.
B) Most military families have to get by on food stamps and help from food pantries and soup kitchens.
C) Military pay is high enough to keep virtually all military families well above the official poverty line.
D) Although nearly all of our leading politicians wear American flag lapel pins, they do not provide enough economic support to our troops, so many military families are in severe financial difficulty.

Question 48

The basic problem with the absolute concept of poverty is finding the _____________.

Question 49

Circle the letter that corresponds to the best answer. Which statement is true?

A) Very few poor people hold jobs.
B) The main reason for poverty is that some people refuse to work.
C) A person holding a minimum wage job could raise her family out of poverty.
D) There are millions of people whose jobs don't pay enough to support their families.

Question 50

Circle the letter that corresponds to the best answer. Between 1968 and 2011, the percentage share of total income grew for _________.

A) lowest two quintiles
B) the middle three quintiles
C) the highest quintile
D) the highest quintile and the lowest quintile

Question 51

Circle the letter that corresponds to the best answer. Who made this statement: "I still have the audacity to believe that people everywhere can have three meals a day."

A) Charles Murray
B) William Julius Wilson
C) Barbara Bush (mother of President George W. Bush)
D) Martin Luther King Jr.
E) Lisbeth B. Schorr

Question 52

The richest 1 percent of our population owns over _____________ percent of our wealth.

Question 53

Circle the letter that corresponds to the best answer. Doctors earn more than people in other professions basically because _________.

A) they need to be compensated for all those years they spent in school
B) they are in short supply relative to the demand for their services
C) it costs a lot more to be a doctor-office expenses, support staff, and malpractice insurance-than it does to be in almost any other profession
D) doctors put in longer hours than most other people

Question 54

Circle the letter that corresponds to the best answer. Which statement is false?

A) About three-fourths of the poor are single mothers and their children.
B) About half of the poor are elderly.
C) People living in the South are more likely to be poor than those living in the rest of the country.
D) None of the above.

Question 55

Circle the letter that corresponds to the best answer. Between 1968 and 2011, our income distribution ___________.

A) became more equal
B) stayed about the same
C) became less equal

Question 56

Circle the letter that corresponds to the best answer. Which statement is false?

A) Nearly half of all poor Americans own their own homes.
B) A poor person today has roughly the same standard of living as a middle-income person 30 years ago.
C) The reported consumption spending of people in the lowest income quintile is about twice their reported income.
D) The standard of living of American's poor is comparable to that of most of the rest of the world's poor people.

Question 57

Circle the letter that corresponds to the best answer. Most social scientists define the poor as being the lowest _________ percent of our income recipients.

A) 10
B) 20
C) 3
D) 40
E) 50

Question 58

Use Figure 1 to answer problems 1 through 4.
F igure 1

Turkey has a population of 100 million, 16 million of whom live below the poverty line. Indonesia has a population of 200 million, 50 million of whom live below the poverty line. (a) Calculate the poverty rates of both nations. Twenty-five percent of Turkey's population is under age 18, 5 million of whom are poor. Thirty percent of Indonesia's population is under age 18, 15 million of whom are poor. (b) Calculate the child poverty rates of Turkey and Indonesia.

Question 59

Circle the letter that corresponds to the best answer. About ________ million Americans are homeless.

A) 2 to 3
B) 6 to 8
C) 12 to 15
D) 20 to 25
E) 40 to 50

Question 60

Circle the letter that corresponds to the best answer. Real median family income in the United States has ___________.

A) grown each year since 2000
B) declined each year since 2000
C) risen by about 20 percent since the late 1960s
D) become lower today than it was in 1975

Question 61

Circle the letter that corresponds to the best answer. Who would most likely receive food stamps before the age of 20?

A) a white person
B) a black person
C) an Asian American person
D) a person who grew up in a two-parent household

Question 62

Use Figure 1 to answer problems 1 through 4.
F igure 1

What is the percentage of income received by the lowest quintile on line R?

Question 63

Compare and contrast the conservative and liberal views of poverty.

Question 64

Circle the letter that corresponds to the best answer. Which statement is true?

A) Most poor people are black.
B) Most black people are poor.
C) People over age 65 have a higher poverty rate than the overall rate for Americans.
D) None of the above.

Question 65

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) The welfare rolls today are much lower than they were in 1996.
B) About one in nine Americans lives below the poverty line.
C) Without Social Security benefits, at least 75 percent of all senior citizens would be poor.
D) The Welfare Reform Act of 1996 has cut the poverty rate by almost 60 percent.

Question 66

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) Most poor people receive public assistance (formerly called welfare).
B) Public assistance has been discontinued.
C) The number of people receiving public assistance is less than one-third as high as it was in 1993.
D) Because of the 2007-09 recession, the public assistance rolls have reached an all-time high.

Question 67

What's the difference between the distribution of income and the distribution of wealth? Describe the distribution of income and the distribution of wealth in the United States.

Question 68

The poverty line is set by the _____________.

Question 69

Circle the letter that corresponds to the best answer. Darity and Myers observe that ________.

A) welfare reform will lead to a sharp decline in the number of black families living below the poverty line
B) cutting welfare benefits will increase the ranks of marriageable young black men
C) the underlying cause of poverty is too much government intervention
D) cutting benefits will not lower the number of black female-headed households

Question 70

Circle the letter that corresponds to the best answer. Which statement is true?

A) All of the 10 richest Americans inherited their fortunes.
B) In order to make the top 10 list of American billionaires, you need a fortune of over $15 billion.
C) The two richest families in the United States today are the Rockefellers and the Fords.
D) Most of the 10 richest Americans own large manufacturing companies.

Question 71

Circle the letter that corresponds to the best answer. Which statement best reflects the views of Charles Murray?

A) The main cause of poverty can be traced to the heritage of slavery.
B) Poverty is caused largely by government antipoverty programs.
C) Poverty can be substantially reduced by providing government jobs to all who want to work.
D) The prime cause of poverty is that poor people are basically lazy.