Deck 20: Poverty, Inequality, and Discrimination

Question 1

The United States has less income inequality than most other developed countries.

Answer 1

False

Question 2

The U.S. distribution of income was more unequal in 1990 and 1980 than in 1970.

Answer 2

True

Question 3

In 2017, the U.S. median income for a family of four was about $61,000.

Answer 3

True

Question 4

The lowest-income fifth of the U.S. population ordinarily earns about 20 percent of the income.

Question 5

The relative concept of poverty means that poverty will never be eliminated.

Question 6

In 2017, the poverty line for a family of four was about $42,000.

Question 7

The "War on Poverty" was declared by President Ronald Reagan in 1982.

Question 8

Lyndon Johnson's "War on Poverty" started in the 1980s.

Question 9

Large income differences will be eradicated if the market mechanism is working well.

Question 10

The concept of absolute poverty states that anyone who falls too far behind the average income should be considered poor.

Question 11

Falling below a minimum standard of living illustrates the concept of absolute poverty .

Question 12

Poverty is defined in two ways: the absolute concept of poverty and the relative concept of poverty.

Question 13

In the United States, the incidence of poverty has declined since the 1970s.

Question 14

In 1962, Michael Harrington argued in The Other America that there was chronic, severe poverty in America.

Question 15

The concept of poverty is culturally determined, and hence people are defined as "poor" in relation to others.

Question 16

A market system tends to create inequality.

Question 17

The relative concept of poverty is based on how far behind average income a particular family gets.

Question 18

The highest-income fifth of the U.S. population earns more than 50 percent of all income.

Question 19

There are several reasons why incomes are unequal, including differences in luck, experience, and schooling.

Question 20

Compared to most other industrialized nations, the United States has greater income inequality.

Question 21

Taken as a whole, antipoverty programs may actually put a poor family in a position in which the family becomes worse off if its earnings rise.

Question 22

Programs that reduce the incentive to work make income redistribution inefficient.

Question 23

It is not optimal to have equal incomes.

Question 24

Discrimination exists when a man and a woman with the same levels of education earn different incomes.

Question 25

The negative income tax has little support among economists because it distorts incentives to work.

Question 26

The Earned Income Tax Credit (EITC)is a more efficient means to redistribute income to people below the poverty line than direct cash transfers.

Question 27

Economic discrimination occurs when equivalent factors of production receive different payments for equal contributions to output.

Question 28

In their 1994 book, The Bell Curve, Murray and Herrnstein presented evidence that IQ is an important determinant of economic success.

Question 29

On net, the U.S. tax system is highly progressive.

Question 30

For most welfare recipients, the negative income tax plan would increase incentives to work.

Question 31

TANF compels welfare recipients to go to work after a period of two years.

Question 32

TANF sets a lifetime cap for benefits at 10 years.

Question 33

The total amount of income in a society is independent of how income is distributed.

Question 34

In labor markets, risk taking accounts for some income differences.

Question 35

Economic discrimination occurs when two equal factors of production are paid differently.

Question 36

One benefit of a negative income tax is that it would increase work incentives.

Question 37

Actual experiments show that negative income taxes destroy work incentives.

Question 38

Compensating wage differentials explain some income differences.

Question 39

If two individuals have identical schooling, their incomes will be equal.

Question 40

Tax loopholes increase the progressivity of the federal income tax.

Question 41

In 2017, an income of $125,000 would, roughly, make a family

A)richer than 40 percent of U.S. households but poorer than 35 percent.
B)richer than 50 percent of U.S. households but poorer than 25 percent.
C)richer than 85 percent of U.S. households but poorer than 8 percent.
D)richer than 95 percent of U.S. households but poorer than 1 percent.

Question 42

Because of the book, The Other America, Michael Harrington was important in beginning the

A)Peace Corps.
B)"War on Poverty."
C)regulation of industry.
D)Environmental Protection Agency.

Question 43

The official dividing line between the poor and nonpoor is called the

A)life threshold.
B)life edge.
C)poverty line.
D)beginning line.

Question 44

In a market economy, incomes would be very equal if there was no discrimination.

Question 45

The U.S. income tax system is progressive.

Question 46

The poverty line is meant to distinguish

A)absolute poverty.
B)relative poverty.
C)absolute inequality.
D)relative inequality.

Question 47

Inheritance taxes tend to increase income inequality in the long run.

Question 48

Affirmative action laws require employers to hire specified numbers of minorities.

Question 49

A minority candidate may not have the same chances as a white candidate for a job simply based on an employer's misconceptions about minorities.

Question 50

Two policies to combat discrimination are affirmative action and right-to-work laws.

Question 51

Competitive forces will reduce the effects of employers' discrimination over time.

Question 52

In 2017, approximately what percent of Americans were below the poverty line?

A)2 percent.
B)8 percent.
C)36 percent.
D)12 percent.

Question 53

An employer who refuses to hire women because of the chance they may quit for childbearing purposes is engaging in statistical discrimination .

Question 54

Prejudice leads, inevitably, to economic discrimination.

Question 55

If a female supervisor is discriminated against by one of her workers who refuses to cooperate, she may earn lower wages.

Question 56

Nondiscriminatory firms hiring in the market place have a cost advantage.

Question 57

Affirmative action laws require employers to search for qualified minority applicants but not to necessarily give them jobs.

Question 58

The poverty line is the income level

A)earned by a worker employed full time at the minimum wage.
B)below which a family is officially considered "poor."
C)above which a family is not entitled to government assistance.
D)that is the average for American families.

Question 59

In 2017, the median income for a household of four was about

A)$50,000
B)$60,000
C)$80,000
D)$100,000

Question 60

Discrimination can come from many groups of people, including employers and fellow employees.

Question 61

An example of an in-kind benefit is

A)a welfare payment.
B)capital gains.
C)a charitable contribution of money.
D)public housing.

Question 62

The basic problem with the government setting an absolute poverty line is that it is

A)completely objective.
B)somewhat arbitrary.
C)unconstitutional.
D)based on average income.

Question 63

If incomes were equally distributed in the United States, each fifth of the population would receive ____ percent of the income.

A)5
B)10
C)15
D)20

Question 64

The poor are those who fall too far behind the average income. This refers to the ____ definition of poverty.

A)marginal
B)absolute
C)relative
D)threshold

Question 65

In 2017, about what percentage of total income was earned by the poorest fifth of all U.S. households?

A)12 percent
B)6 percent
C)3 percent
D)1 percent

Question 66

In 2017, the poverty line for a family of four was approximately

A)$15,000
B)$25,000.
C)$35,000.

Question 67

The relative concept of poverty is based on income relative to the

A)poverty line.
B)average income.
C)lowest 10 percent of incomes.
D)highest 10 percent of incomes.

Question 68

Official data may overstate the extent of poverty because

A)poverty is a relative concept as opposed to an absolute concept.
B)it does not add "in-kind" transfers to the incomes of the poor.
C)it overstates the taxes paid by the poor.
D)it overestimates the amount the poor earn in the "underground economy."

Question 69

If one includes in-kind income in the calculation, the

A)official poverty rate becomes meaningless.
B)incidence of poverty actually increases.
C)poverty rate is unchanged.
D)fraction of the population in poverty drops.

Question 70

If income redistribution policy is based on the relative concept of poverty, the war on poverty

A)will be won quite soon.
B)is, by definition, unwinnable.
C)has not helped at all.
D)has already been won.

Question 71

If you fall short of a certain minimum standard of living, you are poor; once you pass this standard, you are no longer poor. This refers to the ____ definition of poverty.

A)average
B)absolute
C)relative
D)threshold

Question 72

Which of the following is most accurate about poverty in the United States as measured by the poverty line?

A)Poverty has steadily declined since the 1950s.
B)Poverty declined through the 1950s and 1960s, but on net has not improved since then.
C)Poverty, on net, has significantly worsened over the last 70 years.
D)The greatest reductions in poverty occurred in the 1980s, but on net have not improved significantly since then.

Question 73

In 2017, about what percentage of total income was earned by the richest fifth of all U.S. households?

A)30 percent
B)50 percent
C)70 percent
D)90 percent

Question 74

About what percentage of the poor are children?

A)13 percent
B)24 percent
C)36 percent
D)60 percent

Question 75

Which of the following measures absolute poverty?

A)Median income
B)The lower quintile of income
C)The poverty line
D)The poverty standard

Question 76

Under a relative concept of poverty, poverty

A)doesn't really exist.
B)is higher in rich countries than in poor countries.
C)can never be wholly eliminated by public policy.
D)declines as technology advances.

Question 77

The national poverty rate in the United States reached a low in the

A)early 1960s.
B)early 1970s.
C)late 1970s.
D)early 1980s.

Question 78

The concept of relative poverty

A)leads to the concept of inequality.
B)replaces the need for concepts of absolute poverty.
C)is measured relative to the poverty line.
D)is only relevant in low income countries.

Question 79

The two ways to define poverty are which of the following?

A)Relatively and absolutely
B)Absolutely and definitely
C)Definitely and conceptually
D)Definitely and receptively

Question 80

Under a system of free, competitive markets,

A)a society can usually achieve efficiency only at the expense of equality.
B)poverty cannot exist in the long run.
C)employers do not practice statistical discrimination.
D)income is distributed equally across the population.