Question 1

Which of the following is a goal of an in-kind transfer program but not a cash transfer program?

Accepted Answer

In-kind transfer programs provide specific types of aid, such as food stamps or housing vouchers, to ensure that recipients receive the intended resources. Cash transfer programs, on the other hand, give recipients the flexibility to use the money as they see fit. Thus, ensuring that recipients get the type of aid intended is a goal of an in-kind transfer program but not a cash transfer program.

Question 2

Which of the following is an example of an in-kind transfer?

Accepted Answer

Medicaid is an in-kind transfer because it provides free or low-cost healthcare services to eligible individuals and families, rather than giving them cash or vouchers to purchase healthcare on their own. A and D are income transfers and B is a program that provides cash assistance.

Question 3

The percentage of income transfers that go to their intended recipients and purposes refers to the

Accepted Answer

Target efficiency measures the effectiveness of income transfers in reaching their intended recipients and purposes. Therefore, the percentage of income transfers that go to their intended recipients and purposes is a measure of target efficiency.

Question 4

In-kind transfers

Accepted Answer

In-kind transfers provide the direct transfer of goods and services, such as food stamps or housing assistance. They are not a payment for work, nor do they necessarily increase the poverty index. In fact, in-kind transfers can help reduce the moral hazards of the welfare system by ensuring that the assistance provided is used for its intended purpose.

Question 5

Income transfers that entail direct payments to recipients,such as unemployment benefits,are known as

Accepted Answer

Cash transfers entail direct payments to recipients. In-kind transfers involve providing goods or services directly to the recipient (such as food stamps), while money transfers can refer to any type of monetary transaction (such as wire transfers). Dollar transfers are not a commonly used term in the context of income transfers.

Question 6

Which of the following programs is the second-largest federal income transfer program?

Accepted Answer

Medicare is the second-largest federal income transfer program after Social Security.

Question 7

Which of the following student aid programs is likely to have the highest target efficiency?

Accepted Answer

Direct payment of tuition to the university is likely to have the highest target efficiency as it ensures that the aid provided is used solely for the purpose of education and there is no risk of the funds being used for non-educational expenses. This also helps in reducing the administrative burden on the student and ensuring that they are able to focus on their studies without financial worries. Furthermore, it ensures that the university receives funds for tuition, increasing the likelihood of the student completing their degree.

Question 8

Which of the following programs is the largest federal income transfer program?

Accepted Answer

Social Security is the largest federal income transfer program, with over 64 million beneficiaries in 2021, according to the Social Security Administration. While welfare, unemployment compensation, and food stamps are all important programs that provide assistance to low-income individuals and families, they serve fewer beneficiaries overall.

Question 9

Transfer payments are

Accepted Answer

Transfer payments are payments made by governments, typically to individuals or groups, without any exchange of goods or services. Examples include welfare payments, subsidies, and pensions. This is distinct from government tax receipts (B) or expenditures on goods and services (C), which involve a transaction or exchange. Social Security taxes paid by employers (D) is not a transfer payment, as it involves a contribution to a specific government program rather than a payment to an individual or group.

Question 10

Transfer payments include all of the following except

Accepted Answer

Transfer payments refer to payments made by the government to individuals or groups without any goods or services being exchanged. Examples include Social Security benefits, welfare payments, and subsidies for farmers. Church-run thrift stores do not involve government payments, so they are not considered transfer payments.

Question 11

When a program is means-tested,it means that

Accepted Answer

Means-testing refers to the requirement that an individual's income and assets fall below a certain threshold in order to be eligible for a particular program or benefit. Therefore, A is the best choice as it accurately reflects this definition. B, C, and D are incorrect answers as they do not relate to means-testing.

Question 12

Which of the following programs is likely to have low target efficiency?

Accepted Answer

A cash payment that the recipient is encouraged to use for housing may not be as efficient as other programs because there is no guarantee that the recipient will actually use the money for housing. There is a risk that the money may be spent on other non-housing related expenses. Programs like A, B, and C have more targeted efficiency because the insurance card can only be used for health care, the cash payment is directly paid to the landlord for housing, and the food stamps can only be used to purchase food.

Question 13

Means-tested income transfer programs are referred to as

Accepted Answer

Means-tested income transfer programs are commonly referred to as welfare programs. These programs are designed to provide assistance to individuals and families living in poverty by offering various forms of aid, such as cash assistance, food stamps, and housing vouchers. They are means-tested in that eligibility is determined by a person's income and resources.

Question 14

To be eligible for a welfare program,the recipient must

Accepted Answer

Welfare programs are designed to provide assistance to those with low income who are struggling to meet their basic needs such as food, shelter, and healthcare. Being elderly or in need of medical care may be factors that contribute to a person's need for assistance, but they are not the sole criteria for eligibility. Contributing to the fund is also not a requirement for welfare assistance.

Question 15

Social Security benefits paid by the federal government

Accepted Answer

Social Security benefits are funded through payroll taxes on workers and employers, making them income transfers from those who earn income to those who have retired or become disabled.

Question 16

Social Security is an example of

Accepted Answer

Social Security is a cash transfer program that provides retirement, disability, and survivor benefits to eligible individuals who have contributed to the program through payroll taxes. It is not considered an in-kind transfer program as it does not provide goods or services directly to individuals in need, nor is it considered a welfare program as it is not means-tested and individuals do not need to demonstrate financial need to receive benefits.

Question 17

Which of the following is not an example of in-kind income?

Accepted Answer

In-kind income refers to non-cash benefits that are received instead of cash, such as food stamps, housing assistance, and subsidized school lunches. Unemployment benefits, on the other hand, are typically considered cash income.

Question 18

In-kind transfers tend to be

Accepted Answer

In-kind transfers refer to non-monetary benefits such as food stamps, housing subsidies, or medical care. These transfers are more target-efficient than cash because they are directed towards specific needs and cannot be used on other expenses. In-kind transfers may help alleviate poverty and can increase the standard of living for low-income households. Thus, option B is the correct one.

Question 19

Which of the following is most likely to occur if Medicare is converted from an in-kind transfer program to a cash transfer program?

Accepted Answer

If Medicare is converted from an in-kind transfer program to a cash transfer program, a reduction in health care for the elderly is likely to occur. This is because a cash transfer program would provide beneficiaries with a fixed amount of money to purchase health care, but it may not cover the full cost of medical treatments, leading to reduced access to health care services for seniors.

Question 20

In-kind transfers are

Accepted Answer

In-kind transfers refer to the transfer of goods and services rather than cash. This includes things like food stamps or housing assistance.

Quiz 34: Transfer Payments: Welfare and Social Security