Question 1

The income gap between older men and women may diminish in the future, but it will probably still exist. Which of the following is NOT an accepted condition that explains lower retirement incomes for women in the future?

Accepted Answer

The statement about women making less use of Individual Retirement Accounts (IRAs) and losing control over this part of their retirement income is not an accepted condition explaining lower retirement incomes for women. The other options (B, C, D) are commonly cited reasons for the income gap in retirement between men and women, such as lower-paying jobs, shorter work careers due to family care, and less access to pension plans due to the nature of their employment.

Question 2

A study by Rayman, Allshouse, and Allen (1993) found that the income gap between older men and women is due to

Accepted Answer

The answer of A study by Rayman, Allshouse, and Allen...

Question 3

The U.S. Department of Labor (2010) reports that, compared to a man in the labor force, a woman in the labor force on average earned __% of his salary.

Accepted Answer

According to the U.S. Department of Labor report from 2010, a woman in the labor force earns on average 80% of the salary earned by a man in the labor force.

Question 4

The U.S. Department of Labor (2010) reports that women aged 16 to 24 get pay equivalent to __% of young men. If this pattern continues, younger cohorts of women will have ________ incomes in old age.

Accepted Answer

The answer of The U.S. Department of Labor (2010) reports...

Question 5

Older married people have ________ income rates compared to nonmarried older people.

Accepted Answer

Studies have shown that older married people have better income rates than nonmarried older people. Marriage provides an opportunity for joint decision-making and shared resources, which can lead to increased financial stability. Additionally, married couples may have had longer careers and may have benefited from joint retirement savings.

Question 6

Couples have higher incomes than unmarried people for three reasons. Which of the following is NOT a reason?

Accepted Answer

While it is true that some couples benefit from having two incomes and that couples can get the highest wage earner's Social Security benefits, and widows may experience a decrease in income after a spouse's death, the statement that unmarried people have lower paying jobs than married people is not necessarily true. There are many unmarried people who have high paying jobs and many married people who have lower paying jobs.

Question 7

Minority older people have ________ income rates than whites.

Accepted Answer

Studies have consistently shown that minority older people, particularly African Americans and Hispanics, have lower income rates than whites. This is due to factors such as discrimination in the job market, lower educational opportunities, and disparities in access to quality healthcare and affordable housing.

Question 8

African American and Hispanic American older women had a poverty rate more than ________ times the rate of white women.

Accepted Answer

African American and Hispanic American older women have historically faced higher poverty rates compared to white women, often more than three times the rate, due to systemic inequalities and disparities in income, employment, and access to resources.

Question 9

What is the key to reducing the disproportionate poverty levels among minorities and providing them in old age with a more secure income base and higher pension entitlement?

Accepted Answer

The answer of What is the key to reducing the...

Question 10

An end to poverty in old age would include all but the following:

Accepted Answer

While more affordable prescription medicine may help alleviate some financial burdens for senior citizens, it is not the only solution to end poverty in old age. The other options listed (increases in SSI and Social Security, better health insurance, and more affordable housing) all address different aspects of the issue, such as increasing income, reducing healthcare costs, and providing stable housing.

Question 11

Pension reform can at best make up for some of the inequities minorities suffer. Therefore, the need for pension reform points to the need for

Accepted Answer

Pension reform can only address some of the inequities faced by minorities in the current societal structure. Therefore, it points to the need for larger societal reform to address systemic injustices and create a more equitable society for all. Legislation reform, more enlightened hiring practices, and public education can all play a role in this larger societal reform, but none of them alone can fully address the issue.

Question 12

Social Security policies assume that in the average family the husband works in the labor force and the wife stays at home. Schulz (2001) says that this reflects a(n)

Accepted Answer

Studies show that today, both spouses are more likely to work to support their families. Therefore, Social Security policies that assume the husband works and the wife stays at home are no longer typical in the U.S.

Question 13

Currently, Social Security policies penalize women who take more time out of the workforce to care for children. Which of the following is a suggested reform to Social Security?

Accepted Answer

Providing homemakers with homemaker credits based on an estimated income for their household work would help to offset the penalty that women currently face for taking time out of the workforce to care for children. This reform would acknowledge the value of the work that women do in the home and provide them with the appropriate benefits. Options B, C, and D do not address the issue of valuing homemakers' work or reducing the penalty for taking time out of the workforce.

Question 14

Reforms in homemaker credits, spousal pensions, widow's benefits, and income limits would bring ________ policies in line with a woman's life course today.

Accepted Answer

Homemaker credits, spousal pensions, widow's benefits, and income limits are all related to Social Security policies. SSI, employment pensions, and IRAs are not directly relevant to these specific policies.

Question 15

Which of the following is not a critique of the Supplemental Security Income (SSI) program?

Accepted Answer

A, B, and C are all common critiques of the SSI program, but D is not directly related to the program itself. While the program may not solve larger social issues, this is not a critique specific to SSI, but rather a limitation of any social welfare program.

Question 16

Vesting, portability, and better insurance are all reforms suggested for

Accepted Answer

Vesting, portability, and better insurance are all reforms suggested specifically for private pensions. SSI and Social Security are government-run programs, and IRAs are individual retirement accounts that are not governed by the same regulations as pensions.

Question 17

The current five-year employment requirement for full vesting of pension plans often hurts workers who change jobs, lose their jobs, or who take time out for family care. The government could reform this part of pension plans by

Accepted Answer

A shorter vesting period would allow workers to become fully vested in their pension plans sooner, which would benefit those who change jobs frequently, lose their jobs, or take time out for family care. This would provide greater financial security for workers and their families without placing undue burdens on employers. Eliminating vesting periods or mandating partial benefits would be too extreme, while a longer vesting period would only exacerbate the current problem. Therefore, legislating a shorter vesting period is the most practical solution.

Question 18

The federal government set up the Pension Benefit Guaranty Corporation (PBGC) to insure private defined benefit pension plans. Critics are calling for a review of the PBGC because

Accepted Answer

The PBGC has a large deficit and may not be able to cover underfunded pension plans if they fail. This is a major issue that needs to be addressed in order to ensure that retirees receive the pensions they were promised. However, options A, B, and D are not accurate criticisms of the PBGC.

Question 19

The U.S. retirement income system provides a ________ standard of living for most older people and keeps the poorest older people ________.

Accepted Answer

The U.S. retirement income system provides a decent standard of living for most older people and keeps the poorest older people out of poverty.

Question 20

The large size of the Baby Boom generation, a smaller number of future workers, and an increase in life expectancy will

Accepted Answer

The large size of the Baby Boom generation means that there will be a larger number of retirees in the coming years. However, there will be a smaller number of future workers paying into the Social Security system. In addition, people are living longer, which means they will be receiving payments for a longer period of time. These factors will strain the Social Security system and cause a shortfall in payments.

Quiz 8: Finances and Economics