Deck 21: Poverty, Inequality, and Discrimination

Question 1

Over the last 50 years,the rich have:

A)become richer,and the poor have become richer,too.
B)become richer,and the poor have become poorer.
C)become relatively poorer,and the poor have become relatively richer.
D)become relatively poorer,and the poor have become relatively poorer,too.

Answer 1

become richer,and the poor have become richer,too.

Question 2

The absolute poverty line looks at _____________,and the relative poverty line captures ____________

A)who cannot afford the basic necessities;what people can afford compared to those around them.
B)what people can afford compared to those around them;who cannot afford the basic necessities.
C)the percentage of the population that falls within the lowest quartile of income earners;the percentage of the population that earns 40 percent less than the median income.
D)the percentage of the population that falls within the lowest quartile of income earners;what people can afford compared to those around them.

Answer 2

who cannot afford the basic necessities;what people can afford compared to those around them.

Question 3

To understand how poverty,inequality,and discrimination affect the economy,__________ analysis is used,and _________ analysis is used to address whether the government should try to reduce inequality in the name of social justice.

A)positive;normative
B)positive;objective
C)subjective;normative
D)normative;positive

Answer 3

positive;normative

Question 4

Critics of the U.S.definition of poverty claim that:

A)it is set too low,because many currently spend less than 1/3 of their income on food.
B)it is set too high,because many currently spend less than 1/3 of their income on food.
C)it is set too low,because many currently spend more than 1/3 of their income on food.
D)it is set too high,because many currently spend more than 1/3 of their income on food.

Question 5

In the United States,the official poverty line is based on:

A)the price of food.
B)the price of housing.
C)the price of clothing.
D)the average income of the lowest quartile of income earners.

Question 6

According to economist Emmanuel Saez,between 1993 and 2010,the incomes of the richest 1 percent grew by ________,and the other 99 percent grew by ________ on average.

A)58 percent;6.4 percent
B)58 percent;64 percent
C)5.8 percent;6.4 percent
D)5.8 percent;64 percent

Question 7

Since 1970,the poverty rate has largely fluctuated between:

A)10 and 15 percent.
B)5 and 10 percent.
C)0 and 5 percent.
D)15 and 25 percent.

Question 8

Over the last 50 years,the poor have:

A)become richer at a slower rate than the rich,and so inequality has grown.
B)become richer at a slower rate than the rich,and so inequality has decreased.
C)become richer at the same rate as the rich,and so inequality has stayed the same.
D)become poorer,while the rich have become richer,and so inequality has grown.

Question 9

Critics of the U.S.definition of poverty claim it is an inaccurate measure of our poor because:

A)it is a sole number,and does not capture regional differences in the cost of living.
B)the ratio of food to total income is different now when the definition of poverty was defined.
C)it fails to account accurately for expenditures other than food.
D)All of these are true.

Question 10

Over the last 50 years,poverty has been:

A)falling,and inequality has been rising.
B)falling,and inequality has been falling as well.
C)rising,and inequality has been rising as well.
D)rising,and inequality has been falling.

Question 11

In the United States,the official poverty line is calculated by multiplying:

A)the average expenditure on housing for a family of a given size by 3.
B)the cost of food for a family of a given size by 3.
C)the average expenditure on housing for a family of a given size by 2.
D)the cost of food for a family of a given size by 2.

Question 12

The relative poverty line defines poverty:

A)in relation to the income of the rest of the population.
B)based on the expenditure on food relative to total income.
C)as the price of basic food,clothing,shelter and utilities,and adjusts for geographic differences in the cost of living.
D)None of these is true.

Question 13

Because the U.S.poverty line is an absolute measure rather than a relative one,the official U.S.poverty rate:

A)fell steadily when there was economic growth that raised the incomes of low-income families.
B)increased steadily when there was economic growth that raised the incomes of low-income families.
C)fell steadily when there was economic growth that caused inequality to grow among the population.
D)increased steadily when there was economic growth that caused inequality to decline across the population.

Question 14

An absolute poverty line is usually set based on:

A)the cost of certain essential goods.
B)a certain percentage below the average income in a society.
C)the lowest quartile of income earners in a society.
D)the lowest 1 percent of all income earners in a society.

Question 15

When the U.S.experiences economic growth,the poverty rate will:

A)fall,because growth has benefited everyone.
B)increase,because growth typically only benefits the richest 1 percent.
C)fall,because growth typically helps the poor more than the wealthy.
D)increase,because growth has benefited the wealthy more than the poor.

Question 16

In 2011,the Census Bureau introduced an alternate poverty measure that is based on:

A)the price of food,and adjusts for geographic differences in the cost of living.
B)the prices of food,clothing,shelter,and utilities,and adjusts for geographic differences in the cost of living.
C)the price of housing,and adjusts for geographic differences in the cost of living.
D)the average income of the lowest quartile of income earners.

Question 17

The US government began tracking poverty in the late:

A)1950s.
B)1960s.
C)1970s.
D)1940s.

Question 18

In 2010,what percent of the population lived under the official poverty line in the United States?

A)15.1 percent,higher than a near all-time low of 11.3 percent in 2000.
B)11.3 percent,down from a near all-time high of 15.1 percent in 2000.
C)15.1 percent,higher than a near all-time low of 3.11 percent in 2000.
D)11.3 percent,down from a near all-time high of 25 percent in 2000.

Question 19

The poverty rate is defined as:

A)the percentage of the population that falls below the absolute poverty line.
B)the percentage of the population that falls below the relative poverty line.
C)the percentage of low income earners to high income earners.
D)the lowest one percent of all income earners.

Question 20

When a society is more equal:

A)the economy grows,so the best economy is the most equal.
B)the economy grows,but that doesn't mean the most equal society is the best society.
C)economic growth will create imbalance,and the government will need to work to equalize incomes.
D)economic growth will encourage balance,since equality spurs entrepreneurship and innovation.

Question 21

The percent of population that experiences transient poverty at some point in their lives is:

A)more than 25 percent.
B)less than 10 percent.
C)approximately 12 percent.
D)approximately 40 percent.

Question 22

In 2008,the number of people living in the world on less than $1.25 a day was:

A)just over a fifth of the world's population.
B)roughly a third of the world's population.
C)just over a quarter of the world's population.
D)just under 10 percent of the world's population.

Question 23

More than a quarter of the population experiences ________ poverty at some point in their lives,perhaps due to losing a job or experiencing sickness or injury.

A)transient
B)abject
C)chronic
D)None of these is true.

Question 24

Those who are chronically poor are defined as those who spend:

A)three or more years in poverty.
B)at least two consecutive months within a year in poverty.
C)two or more years in poverty.
D)at least six consecutive months within a year in poverty.

Question 25

Research shows programs like unemployment insurance,disability or health insurance,and job training can be effective in fighting:

A)transient poverty,but not chronic poverty.
B)both transient and chronic poverty.
C)chronic poverty,but not transient poverty.
D)neither transient nor chronic poverty.

Question 26

Between 1960 and 1995,Social Security benefits:

A)increased,helping reduce the poverty rate among the elderly.
B)increased,which increased the poverty rate among the elderly.
C)decreased,helping reduce the poverty rate among the elderly.
D)decreased,which increased the poverty rate among the elderly.

Question 27

The international poverty line at $1.25 a day at purchasing power parity means that in each country the poverty line is the amount that will allow you to buy a basket of goods equivalent to what $1.25 would buy:

A)in the United States.
B)in the richest of the countries that uses the index.
C)in the poorest of the countries that uses the index.
D)in the average economy of all the countries that use the index.

Question 28

Today black and Hispanic Americans have poverty rates:

A)twice as high as white Americans.
B)three times as high as white Americans.
C)half as high as white Americans.
D)four times as high as white Americans.

Question 29

In the United States today,households headed by single women are more likely to be poor than:

A)white males.
B)black males.
C)Hispanic males.
D)All of these are true.

Question 30

The greatest number of people who live on $1.25 a day live in:

A)South Asia.
B)China.
C)sub-Saharan Africa.
D)None of these is true.

Question 31

An effective program used to fight transient poverty is:

A)unemployment insurance.
B)health insurance.
C)job training.
D)All of these are effective at fighting transient poverty.

Question 32

Those who are considered the transient poor are defined as those who spend:

A)at least two consecutive months within a year in poverty.
B)three or more years in poverty.
C)two or more years in poverty.
D)at least six consecutive months within a year in poverty.

Question 33

The PPP index:

A)describes the overall difference in prices between countries.
B)describes the overall inequality present in one country compared to another.
C)describes the overall differences in poverty levels between countries.
D)None of these is true.

Question 34

Between 1960 and 1995,Social Security benefits:

A)decreased from 35 percent down to 10 percent.
B)increased from 10 percent to 35 percent.
C)increased,decreasing the poverty rate among the elderly from 35 percent down to 10 percent.
D)decreased,increasing the poverty rate among the elderly from 10 percent to 35 percent.

Question 35

Research suggests that about ______ percent of people living under the poverty line in any given year are chronically poor.

A)3
B)8
C)13
D)38

Question 36

Economists collect data on prices in every country and develop an index that describes the overall difference in prices between countries called the:

A)purchasing power parity index.
B)price parity purchasing index.
C)consumer price index.
D)consumer purchasing power index.

Question 37

The most common international poverty measure is:

A)the number of people living on less than $1.25 per day.
B)the number of people living on less than $5 per day.
C)the absolute poverty line,as defined by the U.S.Census Bureau.
D)the poorest 1 percent of income earners within a given country.

Question 38

U.S.households headed by __________ are the most likely to be poor.

A)single women
B)Hispanic males
C)those under age 18
D)single males

Question 39

Today the greatest number of poor is _________ Americans,but the poverty rate for __________ is higher.

A)white;black and Hispanic
B)black;white
C)black;Hispanic
D)white;Hispanic

Question 40

The highest percentage of people who live on less than $1.25 a day live in:

A)sub-Saharan Africa.
B)South Asia.
C)China.
D)None of these is true.

Question 41

The $1.25 (PPP)per day line was chosen by averaging the national poverty lines of 15 poor countries to represent:

A)absolute poverty by some globally comparable standard.
B)chronic poverty by some globally comparable standard.
C)transient poverty by some globally comparable standard.
D)relative poverty by some globally comparable standard.

Question 42

A credit constraint is:

A)the inability to get a loan even though a person expects to be able to repay the loan plus interest.
B)the inability to repay a loan even though a person has acceptable credit history.
C)the ability to take on more loans than one can repay.
D)the maximum amount of load one is entitled to take.

Question 43

Communitywide poverty:

A)creates problems beyond those faced by individuals.
B)is nonexistent in the developed world.
C)helps individual poverty.
D)None of these is true.

Question 44

Which of the following area of the world experienced virtually no change in its poverty rate from 1981 to 2008?

A)sub-Saharan Africa
B)China
C)South Asia
D)India

Question 45

A key to creating effective policy to fight poverty is to understand:

A)why people are poor.
B)the correlation between education and income.
C)the correlation between income and geographic location.
D)the unintended consequences of reductions in the incentive to work.

Question 46

Long-term solutions to communitywide poverty must involve:

A)ways to grow the economy.
B)increasing the value of the currency.
C)democratic leadership.
D)All of these are true.

Question 47

An example of policy that aims to break the negative cycle of poverty and low human capital is:

A)policy that improves schools.
B)policy that offers training in job skills.
C)policy that provides health care.
D)All of these are examples of policy that can break the negative cycle of poverty and human capital.

Question 48

Self- reinforcing mechanisms that cause the poor to stay poor are called:

A)poverty traps.
B)social aberrances.
C)social networks.
D)societal traps.

Question 49

If the population is split up into quintiles by income,the bottom quintile would include:

A)the poorest half of the population.
B)the poorest 60 percent of the population.
C)the richest half of the population.
D)the poorest 20 percent of the population.

Question 50

The set of skills,knowledge,experience,and talent that determine people's productivity as workers is called:

A)human capital.
B)physical capital.
C)investment.
D)educational training.

Question 51

Bad health is an example of:

A)a poverty trap.
B)a social digression.
C)a societal trap.
D)None of these is true.

Question 52

You acquire human capital by:

A)getting an education.
B)investing in health care.
C)gaining experience in jobs.
D)All of these are true.

Question 53

Evidence shows that children from poor communities typically have:

A)reduced opportunities to acquire human capital.
B)increased opportunities to acquire human capital.
C)equal opportunities to acquire human capital,but choose not to acquire as much on average than others.
D)equal opportunities to acquire human capital,and choose to acquire more on average than others.

Question 54

The more human capital you have,the more likely you will:

A)earn more money.
B)be unemployable.
C)not benefit from specializing.
D)All of these are true.

Question 55

By monitoring financial diaries of several of the world's poorest families,economists found that a challenge facing the poor was:

A)they did not have the financial tools available to save.
B)their income is quite inconsistent,in addition to being low.
C)they actively need to manage their money.
D)All of these are true.

Question 56

In the last few decades,income inequality in the United States has ___________ mostly because of the ____________

A)increased;gains by the rich.
B)increased;stagnation of the rich.
C)decreased;gains by the poor.
D)decreased;stagnation by the economy in general.

Question 57

Overall,rapid economic growth has ______ the global poverty rate from __________________.

A)decreased;above 50 percent to below 25 percent
B)increased;below 25 percent to above 50 percent
C)decreased;above 30 percent to below 15 percent
D)increased;below 15 percent to above 25 percent

Question 58

Does low human capital cause poverty or does poverty cause low human capital?

A)The causality works both ways.
B)Low human capital causes poverty,not the other way around.
C)Poverty causes low human capital,not the other way around.
D)There is no causal link between low human capital and poverty.

Question 59

Those who believe that overall economic growth is more important than the distribution of income would say that:

A)if everyone is getting richer,the relative speed of these gains isn't as important.
B)it is fundamentally unjust for some people to have so much when others have so little.
C)if the society is not getting richer,then things can never become more equal.
D)All of these are true.

Question 60

The poverty rate dropped from 84 percent in 1981 to 13 percent in 2008 in what country?

A)China
B)Chile
C)South Africa
D)India

Question 61

The Lorenz curve maps:

A)the cumulative percentage of the population against the cumulative percentage of income earned by those people.
B)each quintile of the population in order of income-earned against the average income earned by those people.
C)GDP per capita against what people really earn by quintile.
D)None of these describes what the Lorenz curve maps.

Question 62

The Gini coefficient measures:

A)income inequality.
B)poverty prevalence.
C)average income per person.
D)change in average income per person over time.

Question 63

Perfect income equality means:

A)everyone earns the exact same amount.
B)everyone earns exactly what they're worth.
C)people earn different amounts based on what they do,but everyone in the same job earns the same amount.
D)everyone enjoys exactly the same standard of living.

Question 64

Which curve summarizes inequality visually?

A)Lorenz curve
B)Laffer curve
C)Income Inequality curve
D)Gini curve

Question 65

In recent decades,richer countries have experienced __________ inequality,and poor countries have experienced ____________ inequality.

A)increasing;increasing
B)increasing;decreasing
C)decreasing;increasing
D)decreasing;decreasing

Question 66

The Lorenz curve demonstrates:

A)inequality visually;the more linear the curve,the less inequality exists.
B)inequality visually;the more linear the curve,the more inequality exists.
C)average income levels per capita;the more linear the curve,the less inequality exists.
D)average income levels per quintile;the more linear the curve,the more inequality exists.

Question 67

The global pattern of inequality has:

A)been changing in recent decades.
B)remained surprisingly unchanged for the past several decades.
C)changed significantly after each World War.
D)not changed since the Great Depression redefined inequality for the world.

Question 68

The ______ the Lorenz curve is from the line of perfect equality,the _____ is the Gini coefficient,and the __________ income equality exists.

A)farther;higher;less
B)farther;higher;more
C)closer;higher;less
D)closer;lower;less

Question 69

The _________ bowed inward the Lorenz curve is,the __________ inequality exists.

A)more;more
B)less;more
C)more;less
D)None of these is true.

Question 70

In the United States,the top 20 percent of income earners earn:

A)over 50 percent of total income.
B)over 60 percent of total income.
C)over 70 percent of total income.
D)just under 40 percent of total income.

Question 71

The Gini coefficient is calculated by measuring the area between:

A)the line of perfect equality and the Lorenz curve.
B)the line of perfect inequality and the Lorenz curve.
C)the Lorenz curve and the x-axis.
D)the Lorenz curve and the y-axis.

Question 72

Inequality within countries has been __________,and inequality between countries has been _________ in recent decades.

A)increasing;decreasing
B)increasing;increasing
C)decreasing;increasing
D)decreasing;decreasing

Question 73

The top quintiles of income earners in every country today:

A)earns disproportionately more than the bottom quintile.
B)earns disproportionately less than they did 100 years ago.
C)earns disproportionately less than the middle quintile.
D)All of these are true.

Question 74

A perfectly straight Lorenz curve would mean:

A)perfect equality,and it does not exist in the real world.
B)perfect inequality,and it does not exist in the real world.
C)perfect equality,and is more common among the wealthy,developed nations.
D)perfect inequality,and is more common among the developing nations.

Question 75

Inequality between countries,in terms of differences in their average national incomes,has been:

A)decreasing over recent decades.
B)increasing over recent decades.
C)decreasing since the 1930s.
D)increasing since the 1930s.

Question 76

Most of Europe has relatively _______ inequality,and much of Latin America and southern Africa has relatively _________ inequality.

A)low;high
B)low;low
C)high;high
D)high;low

Question 77

A Gini coefficient of zero indicates:

A)perfect equality.
B)perfect inequality.
C)there is no income being earned.
D)Computed correctly the Gini coefficient only has values greater than zero.

Question 78

The bottom quintiles of income earners in every country today:

A)earns disproportionately more than the top quintile.
B)earns disproportionately less than they did 100 years ago.
C)earns disproportionately more than the middle quintile.
D)None of these is true.

Question 79

Most countries in the world have Gini coefficients ranging from:

A)0.25 to 0.60.
B)0.20 to 0.85.
C)0.10 to 0.50.
D)0.30 to 0.40.

Question 80

If the U.S.population were split into quintiles based on income,with the lowest quintile representing the poorest 20 percent,then those who earned the average income for the United States would be in the:

A)second quintile.
B)third quintile.
C)fourth quintile.
D)fifth quintile.