Question 1

The percentage of the U.S.population living in poverty in 2009 was:

Accepted Answer

In 2009, the U.S. poverty rate was slightly less than 15%, specifically around 14.3%.

Question 2

The percentage of the population that falls below the poverty line is called the:

Accepted Answer

The poverty rate specifically refers to the percentage of the population that falls below the poverty line, whereas the other choices are not as precise or accurate in describing this measurement. The poverty rate is the most accurate measure of the percentage of the population that falls below the poverty line. The poor rate only measures the number of people in poverty, while the homeless rate only measures those who are homeless, which is a subset of those in poverty.

Question 3

Economists believe that looking at the distribution of income by quintiles at one point in time overstates the true inequality of income because:

Accepted Answer

Looking at the distribution of income at one point in time can be misleading because families near the bottom of the distribution in any given year may be having an unusually bad year, while those at the top may be having an unusually good one. For a more accurate assessment of income inequality, economists would look at trends in income distribution over time. Additionally, transfer payments and taxes also have an impact on income inequality, but the question specifically asks why looking at income quintiles at one point in time can overstate income inequality.

Question 4

Which of the following is associated with poverty?

Accepted Answer

Poverty is often associated with a combination of factors, including lack of adequate employment, lack of education, and lack of proficiency in English. These factors often work together to create barriers to upward mobility and access to resources. Addressing multiple factors simultaneously is critical for reducing poverty rates and improving opportunities for individuals and communities.

Question 5

The single most important factor influencing children's later socioeconomic attainment is:

Accepted Answer

Parental income is a critical factor as it affects access to resources, educational opportunities, and overall stability, which significantly influence children's future socioeconomic status.

Question 6

Which of the following is not a major cause of poverty in the United States?

Accepted Answer

While welfare can contribute to poverty, it is not a major cause of poverty in the United States. The other options listed (educational attainment, discrimination, and lack of adequate health coverage) are all major contributors to poverty in the US.

Question 7

Children raised in poverty have a greater likelihood of living in poverty as adults than do those raised in nonpoor families, because low income is highly correlated with higher:

Accepted Answer

Low income is not only correlated with high school dropout rates, but also with the risk of mental problems and behavioral disorders as well as higher rates of illness and hospitalization. Children who grow up in poverty may lack access to proper healthcare, nutrition, and safe living environments, which can result in chronic health conditions and greater susceptibility to illnesses. Additionally, growing up in poverty may result in exposure to stressors that can negatively impact mental health and contribute to the development of behavioral disorders.

Question 8

Government payments to individuals for which no good or service is produced for the government in exchange are:

Accepted Answer

Transfer payments refer to government payments to individuals or groups for which no good or service is produced in exchange. Examples of transfer payments include Social Security, welfare payments, and unemployment benefits. Government spending refers to all government expenditures, including both spending on goods and services as well as transfer payments. Therefore, option D is the best choice as it specifically identifies transfer payments as the type of government payments being referred to.

Question 9

An example of a social insurance program is:

Accepted Answer

Social Security payments to the disabled are an example of a social insurance program because individuals contribute to the program throughout their working lives, and if they become disabled and unable to work, they are entitled to receive benefits from the program. The program serves as a form of social insurance to protect individuals from the financial risks associated with disability. The other options listed are not examples of social insurance programs. Social Security payments to the disabled are a type of social insurance program, as they provide benefits to individuals who have paid into the system and are in need of financial assistance due to a disability. Expenditure on national defense and purchasing a new city police car are not social insurance programs, as they do not provide benefits to individuals based on their contribution to the system or their level of need. The food stamp program is a social welfare program, not a social insurance program, as it provides assistance based on economic need rather than individual contribution.

Question 10

During the past 25 years the degree of income inequality in the United States has been rising.Which of the following is not a possible reason for this phenomenon?

Accepted Answer

Higher divorce rates have no direct relationship to the degree of income inequality in the United States. The other options, A, B, and C, have been identified as possible reasons for the rising income inequality. Technological progress has increased the demand for high-skilled workers, leading to a greater income gap between high and low-skilled workers. Increased imports of labor-intensive products have led to lower wages for low-skilled workers in the US. Increased immigration has expanded the labor supply, leading to lower wages for low-skilled workers and higher wages for high-skilled workers.

Question 11

Which of the following transactions is a transfer payment?

Accepted Answer

A transfer payment is a payment made by the government to an individual or group of individuals without any expectation of a good or service being provided. Option C, where a senior citizen receives a Social Security payment, fits this definition. Option A is a direct payment for a service, option B is a tax payment, and option D includes all options, which is not the correct answer in this case.

Question 12

Which of the following is not a leading cause of poverty in the United States?

Accepted Answer

While the welfare system is often criticized for perpetuating a culture of poverty, it is not a leading cause of poverty in the United States. Lack of adequate employment, lack of education, and discrimination are all significant factors in the prevalence of poverty.

Question 13

In the United States, the mobility between income groups is:

Accepted Answer

The United States has a relatively high level of mobility between income groups, meaning that people are able to move up or down the economic ladder over time.

Question 14

Which of the following is the best example of social insurance?

Accepted Answer

Social Security is the best example of social insurance as it provides protection and support to individuals and their families in the event of retirement, disability or death. It is a government-sponsored program that provides a safety net and helps to mitigate the risks associated with aging or disability. The other options listed are examples of social welfare programs or types of insurance, but they do not fall under the category of social insurance.

Question 15

In 2009, which of the following demographic groups had the highest poverty rate?

Accepted Answer

According to data from the U.S. Census Bureau in 2009, female-headed families with no husband present had the highest poverty rate at 44.3%. The poverty rate for African-Americans was 25.8%, for Hispanics it was 25.3%, and for whites it was 9.4%.

Question 16

The poverty line is adjusted each year to reflect:

Accepted Answer

The answer of The poverty line is adjusted each year...

Question 17

Studies of family income over time reveal that:

Accepted Answer

Studies show that income mobility is common, especially for young people who often start at lower income levels and move up as they gain experience and skills, then may move down again upon retirement.

Question 18

The poverty threshold for a household with one person in 2010 was:

Accepted Answer

According to the U.S. Census Bureau, the poverty threshold for a household with one person in 2010 was about $11,300.

Question 19

America's poverty rate is ________ than that of most _.

Accepted Answer

Compared to other wealthy nations, America's poverty rate is higher. While America has a higher median income than most developing nations, its poverty rate remains high relative to other wealthy nations due to factors such as income inequality and a lack of social safety net programs.

Question 20

Given that the definition of poverty has not been adjusted to reflect the long-term rise in incomes, you would expect in the percentage of the population living below the poverty line.

Accepted Answer

If the definition of poverty remains unchanged while incomes rise over time, fewer people will fall below the poverty line, leading to a decrease in the percentage of the population living in poverty.

Quiz 18: The Economics of the Welfare State