Deck 18: Income Distribution and Poverty

Question 1

An equal distribution of income would ____________________________________.

A) hurt both the work incentive and the incentive to save
B) hurt neither the work incentive nor the incentive to save
C) hurt the work incentive but not the incentive to save
D) hurt the incentive to save but not the work incentive

Answer 1

A

Question 2

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 these statements is false.

Answer 2

B

Question 3

Between 1968 and 2008, our income distribution has ________________

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

Answer 3

C

Question 4

Which one of the following statements 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' poor is comparable to that of most of the rest of the world's poor people.

Question 5

How much is the percentage of income received by the middle three quintiles on line S?
F igure 1

Question 6

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 7

Real median family income in the U.S. 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 8

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

Question 9

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 these statements is true.

Question 10

Which of the following statements is the most accurate?

A) The welfare rolls today are much lower than they were in 1996.
B) About 1 in 8 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 11

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

Question 12

The basic problem with the absolute concept of poverty is finding the-------------------

Question 13

Darity and Myers predict 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) there will be an increasing number of black families headed by females

Question 14

Which statement is true?

A) All of the 10 richest Americans inherited their fortunes.
B) In order to make the top ten 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 15

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 16

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 17

"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

Question 18

Which is the most accurate statement?

A) Although there are poor children in the U.S., 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 U.S. spend more than double their reported incomes.
D) Although some war veterans are poor, virtually none is homeless because of the efforts of the Veteran's Administration to find them housing.

Question 19

How much is the percentage of income received by the lowest quintile on line R?
F igure 1

Question 20

Compare and contrast the conservative and liberal views of poverty.

Question 21

Which statement is true?

A) Virtually none of the homeless havejobs.
B) Many of the homeless are mentally ill.
C) The homeless are concentrated in a few large cities.
D) None of these statements is true.

Question 22

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 23

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 24

The poverty line is set by the -------------------.

Question 25

Nearly one out of every------ children lives in poverty.

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

Question 26

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 27

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

Question 28

To keep a family of four at the poverty line a person working a 40-hour week would need to earn about ____ an hour.

A) $6
B) $8
C) $10
D) $12
E) $14

Question 29

Social scientists believe--------- the differential between what women and men earn can be explained by employment discrimination.

A) almost all of
B) about half of
C) only a small part of

Question 30

Which one 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 31

Which is the most accurate statement?

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 32

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

Question 33

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 these statements is false.

Question 34

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 35

How much is the percentage of income earned by the highest quintile on Lorenz curve Q?
F igure 1

Question 36

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

Question 37

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 38

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 39

Discuss the basic determinants of income distribution.

Question 40

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 41

Which one of the following statements 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 42

Between 2000 and 2004 the poverty rate ____.

A) rose for four consecutive years
B) fell for four consecutive years
C) rose for two years and then fell for two years
D) fell for two years and then rose for two years

Question 43

About one out of every--------------- black Americans is poor.

Question 44

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

Question 45

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 46

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 47

The Darity-Myers thesis is an attempt to explain ----------.

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

Question 48

Women working full-time earn a little more than------- percent of what is earned by their male counterparts.

A) 33
B) 50
C) 75
D) 100

Question 49

The superrich get most of their income from -------

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

Question 50

Which one of the following statements 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 51

How much is the percentage of income received by the highest quintile on line R?
F igure 1

Question 52

Each of the following is a major source of great wealth except---------.

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

Question 53

The richest fifth of all American families receives--------- percent of our total income.

A) almost 35 c) more than 60
B) about 50 d) more than 75

Question 54

Within the city of New Orleans, most of the victims of Hurricane Katrina were ____.

A) rich and white
B) rich and black
C) poor and white
D) poor and black

Question 55

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 56

Which is not aimed solely at the poor?

A) Food stamps
B) Public assistance
C) Social Security
D) Medicaid

Question 57

Which of the following is the most accurate statement?

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 58

Which is the most accurate statement?
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 59

About -------------percent of all poor people are black.

Question 60

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 61

Between 1968 and 2008, the percentage share of total income grew for the -------
a) lowest two quintiles
b) the middle three quintiles
c) the highest quintile
d) the highest quintile and the lowest quintile

Question 62

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