Question 1

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 × Income)- 10,000.If a family doesn't earn any income,how does the negative income tax affect them?

Accepted Answer

If the family doesn't earn any income, their Taxes Owed would be calculated as (1/3 × 0) - 10,000, which equals -10,000. This means that they would receive an income subsidy of $10,000 to bring their income up to the poverty line.

Question 2

A negative income tax system was designed to

Accepted Answer

A negative income tax system is designed to provide a minimum income to the poor. It differs from traditional welfare programs which provide in-kind benefits or monetary assistance with specific conditions attached. With a negative income tax system, eligible individuals receive cash payments based on their income level, ensuring they have a minimum income to live on.

Question 3

In the Temporary Assistance for Needy Families program,most families

Accepted Answer

The Temporary Assistance for Needy Families program primarily serves female-headed households in which the father is absent. While having both parents in the home may impact eligibility, it is not a requirement. The program also serves families with adult children with disabilities living at home. Additionally, families may still be eligible for other support programs while receiving TANF assistance.

Question 4

Opponents of legislation that proposes to limit the time a family can receive welfare benefits are most likely to argue that time limits are undesirable because

Accepted Answer

Opponents of time limits on welfare benefits argue that such limits would harm innocent children who would be affected if their parents were forced off welfare. These opponents argue that children should not be punished for their parents' inability to find work or lift themselves out of poverty, and that it is the government's responsibility to provide a safety net for the most vulnerable members of society.

Question 5

A common criticism of government programs that are designed to assist the poor is that

Accepted Answer

The criticism that government programs create incentives for people to become needy stems from the belief that these programs may remove the motivation to work and become self-sufficient, thereby perpetuating poverty. This criticism is often used by opponents of government assistance to the poor. The other options do not accurately reflect the common criticisms of government programs that assist the poor.

Question 6

Critics of welfare reform argue that

Accepted Answer

Critics of welfare reform argue that the emphasis on work has forced many mothers into low-paying jobs while not providing adequate child care. While drug addiction and homelessness may be issues for some individuals, they are not necessarily direct results of welfare reform and do not apply to all cases.

Question 7

The Temporary Assistance for Needy Families program has been criticized by some who claim the program

Accepted Answer

The Temporary Assistance for Needy Families (TANF) program has been criticized for potentially increasing the number of poor by not providing sufficient support to lift families out of poverty.

Question 8

Supporters of welfare reform argue that

Accepted Answer

Employment has indeed increased among the demographic groups traditionally on welfare, including single mothers. While private charities may have provided some childcare resources for working mothers, it is not sufficient to replace the support provided by welfare programs. Childhood literacy rates are not necessarily a direct result of welfare reform and may be influenced by other factors. Thus, option C is the best choice as it presents a valid argument in favor of welfare reform.

Question 9

Anti-poverty programs

Accepted Answer

Anti-poverty programs often impose disincentives to work because benefits may decrease as recipients earn more income, creating a high effective marginal tax rate on additional earnings.

Question 10

Proponents of welfare reform claim that programs that do not establish a time limit on recipient benefits harm children by

Accepted Answer

Proponents argue that without time limits, recipients may become reliant on government assistance, which can lead to a cycle of dependency that negatively impacts children.

Question 11

Social security and unemployment insurance benefits are examples of

Accepted Answer

Social security and unemployment insurance benefits are considered welfare payments as they are government-provided financial assistance programs aimed at supporting individuals in need.

Question 12

A negative income tax system would

Accepted Answer

A negative income tax system collects taxes from high-income households and gives transfers to low-income households, making it a form of income redistribution. It does not make taxes more regressive, sever the link between tax policy and income distribution, or eliminate progressive tax rates.

Question 13

Which of the following formulas is most representative of a negative income tax proposal?

Accepted Answer

A negative income tax proposal typically involves reducing taxes owed by a fixed amount, effectively providing a subsidy to those with lower incomes. Option D subtracts a fixed amount from the tax calculation, aligning with this concept.

Question 14

The only qualification to receive government assistance under a negative income tax is

Accepted Answer

The only qualification to receive government assistance under a negative income tax is having a low income. Pre-school children and job training are not mentioned as requirements, and having a working head-of-household is not explicitly stated as a requirement either.

Question 15

Which of the following statements is not correct?

Accepted Answer

A negative income tax program discourages dependency on welfare and provides an incentive for individuals to seek work. However, it does not necessarily require individuals to work in order to be eligible for benefits. Therefore, the statement that it encourages the poor to work in order to be eligible is not correct.

Question 16

Which of the following is an example of a welfare program?

Accepted Answer

Temporary Assistance for Needy Families (TANF) is a welfare program that provides financial assistance to low-income families with children. CGT is a tax, LCT is a type of intergenerational transfer of wealth, and NAFTA is a trade agreement.

Question 17

Which of the following statements is correct?

Accepted Answer

The answer of Which of the following statements is correct?
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Question 18

A tax provision that works much like a negative income tax is the

Accepted Answer

The Earned Income Tax Credit (EITC) is a tax provision that provides low-income working individuals and families with a tax credit. The credit works much like a negative income tax, meaning that the credit can result in a refund that exceeds the amount of taxes owed. This makes it a form of income support for low-income individuals and families.

Question 19

Since the early 1970s,welfare benefits have declined,

Accepted Answer

The statement says that welfare benefits have declined since the early 1970s and the percentage of children living with only one parent has increased. This implies that the decline in welfare benefits has not been offset by an increase in private charities or the negative income tax program. Therefore, option B can be eliminated. The statement also does not suggest that welfare benefits have declined due to the success of the negative income tax program, which further eliminates option A. Finally, option D is incorrect as it contradicts the statement - the percentage of children living with only one parent has actually increased. Option C is the best choice.

Question 20

Which of the following statements is not correct?

Accepted Answer

The decline in welfare benefits since the 1970s has actually been associated with an increase in the percentage of children living with a single parent.

Quiz 20: Income Inequality and Poverty

Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 × Income) - 10,000.If a family doesn't earn any income,how does the negative income tax affect them?

A negative income tax system was designed to

In the Temporary Assistance for Needy Families program,most families

Opponents of legislation that proposes to limit the time a family can receive welfare benefits are most likely to argue that time limits are undesirable because

A common criticism of government programs that are designed to assist the poor is that

Critics of welfare reform argue that

The Temporary Assistance for Needy Families program has been criticized by some who claim the program

Supporters of welfare reform argue that

Anti-poverty programs

Proponents of welfare reform claim that programs that do not establish a time limit on recipient benefits harm children by

Social security and unemployment insurance benefits are examples of

A negative income tax system would

Which of the following formulas is most representative of a negative income tax proposal?

The only qualification to receive government assistance under a negative income tax is

Which of the following statements is not correct?

Which of the following is an example of a welfare program?

Which of the following statements is correct?

A tax provision that works much like a negative income tax is the

Since the early 1970s,welfare benefits have declined,

Which of the following statements is not correct?