Deck 21: Poverty, Inequality, and Discrimination

Question 1

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

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

In 2009,the median income of U.S.families was about $86,000.

Question 5

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

Question 6

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

Question 7

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

Question 8

By 2009,the poverty line for a typical family of four stood at about $27,500.

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

The highest-income fifth of the U.S.population ordinarily earns more than 40 percent of all income.

Question 15

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

Question 16

A market system tends to create inequality.

Question 17

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

Question 18

In 2009,the poverty line for a family of four was about $22,000.

Question 19

The lowest-income fifth of the population ordinarily earns about 20 percent of the income in the United States.

Question 20

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

Question 21

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

Question 22

Actual experiments show that negative income taxes destroy work incentives.

Question 23

Tax loopholes in the personal income tax benefit only very rich people.

Question 24

Compensating wage differentials explain some income differences.

Question 25

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

Question 26

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

Question 27

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

Question 28

Although it was passed in 1996,ANF was not put to the test until the economy slowed in 2000.The food stamp program was eliminated with the passage of TANF.

Question 29

AFDC was an example of an efficient redistribution program.

Question 30

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 31

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

Question 32

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

Question 33

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

Question 34

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

Question 35

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

Question 36

Although economists generally favor a negative income tax,there is little political support for it.

Question 37

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

Question 38

It is not optimal to have equal incomes.

Question 39

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

Question 40

Tax loopholes increase the progressivity of the federal income tax.

Question 41

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

Question 42

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

Question 43

Compared to a nonpoor individual,a poor individual is more likely to be

A)female.
B)black.
C)a child.
D)All of the above are correct.

Question 44

In 1964,the poverty line for a family stood at about which of the following figures?

A)$2,100
B)$3,000
C)$4,500
D)$7,500

Question 45

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 46

Roughly what was the median level of household income in the U.S.in 2009?

A)50,000
B)60,000
C)70,000
D)80,000

Question 47

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

Question 48

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 49

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 50

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 51

The U.S.income tax system is progressive.

Question 52

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

Question 53

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 54

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

Question 55

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

Question 56

In 2009,the poverty line for a family of four was approximately

A)$10,000.
B)$13,000.
C)$15,000.
D)$22,000.

Question 57

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

Question 58

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

Question 59

Roughly what percentage of Americans were officially considered poor in 2009?

A)1.5 percent
B)8.6 percent
C)14.3 percent
D)22.1 percent

Question 60

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

Question 61

Which of the following observations concerning the absolute definition of poverty is true?

A)It is based on average income.
B)It is an optimistic definition.
C)It is not arbitrary in nature.
D)It is a cultural definition.

Question 62

About what percentage of the poor are children?

A)13
B)25
C)35
D)60

Question 63

In 2009 what percentage of total income in the U.S.was earned by the poorest fifth of all U.S.households?

A)1/5
B)1.2%
C)2.0%
D)3.4%

Question 64

Official data may overstate the extent of poverty because

A)poverty is a relative 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 65

In 2009 what percentage of total income in the U.S.was earned by the richest fifth of all U.S.households?

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

Question 66

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 67

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 68

The relative concept of poverty is based on how far a family falls behind the

A)average family income.
B)top 20 percent of families.
C)minimum in wages.
D)any of the above.

Question 69

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 70

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.

Question 71

Which of the following observations concerning poverty rates in America is true?

A)Major increase in poverty in the decade from 1963 to 1973.
B)It hit an all-time low by 1983.
C)The economic boom of the 1990s restored it almost to its 1970s levels.
D)It decreased from 2007 to 2009.

Question 72

If income is distributed equally in a society,the poorest fifth of the population receives

A)5 percent of the total income.
B)one-fifth as much as the richest fifth of the population.
C)20 percent of society's total income.
D)50 percent of society's total income.

Question 73

Table 21-1
$\begin{array} { l c } \text { Income Group } & \begin{array} { c } \text { Share of } \\\text { National Income }\end{array} \\\hline \text { Lowest fifth } & 6 \\\text { Second fifth } & 9 \\\text { Third fifth } & 17 \\\text { Fourth fifth } & 19 \\\text { Highest fifth } & 49\end{array}$

-Consider the economy described by the income distribution in Table 21-1.From this table,we can conclude that the

A)poorest quarter of the population earns 15 percent of the income.
B)"middle" fifth of the population earns 32 percent of the income.
C)poorest quarter of the population earns 19 percent of the income.
D)richest fifth of the population earns 49 percent of the income.

Question 74

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 75

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 76

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 77

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 78

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 79

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 80

In 2009,approximately what income level was the cut-off point for defining a family as "rich"?

A)$72,000
B)$100,000
C)$143,000
D)$195,000