Question 1

Evidence shows that children from poor communities typically have _______ opportunities to acquire human capital.

Accepted Answer

A)  increased
B)  reduced
C)  equal
D)  noE) B) and D)
F) B) and C)

Question 2

To measure income mobility in absolute terms, we would measure whether a person's income:

Accepted Answer

A)  is higher or lower than their parents' income.
B)  places them higher or lower in the income distribution than their parents.
C)  rises as the retirement age is approached.
D)  places them higher or lower in the income distribution than work peers.E) All of the above
F) A) and C)

Question 3

Because the international poverty line is $1.90 a day at purchasing power parity, the poverty line in each country is the amount that will allow you to buy a basket of goods equivalent to what $1.90 would buy in the:

Accepted Answer

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

Question 4

Aid to Families with Dependent Children was a government program with the goal of:

Accepted Answer

A)  redistribution.
B)  social insurance.
C)  economic growth.
D)  reducing unemployment.E) All of the above
F) B) and C)

Question 5

Long-term solutions to community-wide poverty must involve:

Accepted Answer

A)  ways to expand the range of opportunities available to the population.
B)  increasing the value of the community's currency.
C)  ways to reduce the taxes collected by local governments.
D)  All of these are true.E) A) and D)
F) B) and C)

Question 6

Economists recognize that statistical discrimination:

Accepted Answer

A)  is never rational.
B)  discourages some individuals from acquiring skills.
C)  is always illegal, though socially efficient.
D)  results in improved allocation of talent.E) B) and D)
F) None of the above

Question 7

The _______ bowed inward the Lorenz curve is, the _______ inequality exists.

Accepted Answer

A)  less; more
B)  more; less
C)  more; more
D)  None of these are true.E) All of the above
F) A) and B)

Question 8

Which region contains the highest percentage of people who live on less than $1.90 a day?

Accepted Answer

A)  Sub-Saharan Africa
B)  South Asia
C)  China
D)  South AmericaE) A) and D)
F) B) and C)

Question 9

Income mobility tells us:

Accepted Answer

A)  how likely people are to seek out opportunities to better themselves.
B)  the inflation rate associated with wages across all jobs in a country.
C)  how available the opportunity to better oneself is in an economy.
D)  the inflation rate relative to the cost of living in a country.E) C) and D)
F) A) and B)

Question 10

Policy that is created with the goal of increasing economic growth often:

Accepted Answer

A)  indirectly helps eliminate poverty.
B)  indirectly hurts efforts to eliminate poverty.
C)  helps only if it is directed toward poor areas.
D)  None of these are true.E) A) and D)
F) A) and B)

Question 11

The Gini coefficient is calculated by measuring the area between:

Accepted Answer

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

Question 12

As of 2015, the Gini coefficient was 34 in Canada and 41.5 in the United States, which indicates that income inequality is:

Accepted Answer

A)  greater in Canada than in the United States.
B)  greater in the United States than in Canada.
C)  about the same in both countries.
D)  not a problem in either country.E) A) and B)
F) A) and C)

Question 13

In the United States, the official poverty line is calculated by multiplying _______ for a family of a given size by _______.

Accepted Answer

A)  the average expenditure on housing; three
B)  the cost of food; three
C)  the average expenditure on housing; two
D)  the cost of food; twoE) B) and C)
F) None of the above

Question 14

Social insurance programs differ from private insurance programs in that they:

Accepted Answer

A)  serve everyone who meets the baseline eligibility requirements.
B)  use a sliding scale of payment based on ability to pay.
C)  are universally offered to everyone.
D)  None of these are true.E) None of the above
F) All of the above

Question 15

Over the last 50 years, the rich have become _______ and the poor have become _______.

Accepted Answer

A)  richer; poorer
B)  richer; richer
C)  relatively poorer; relatively richer
D)  relatively poorer; relatively poorerE) A) and C)
F) A) and B)

Question 16

Which of the following programs is likely to reduce chronic poverty?

Accepted Answer

A)  Unemployment insurance
B)  Health insurance
C)  Job training
D)  None of these are likely to reduce chronic poverty.E) A) and B)
F) A) and D)

Question 17

Between 1960 and 1995, Social Security benefits _______, which _______ the poverty rate among the elderly.

Accepted Answer

A)  rose; increased
B)  fell; reduced
C)  rose; reduced
D)  fell; increasedE) B) and D)
F) None of the above

Question 18

Which of the following is an example of a policy aimed at economic development that would also indirectly impact poverty?

Accepted Answer

A)  Food stamps
B)  Public investments in education
C)  Earned income tax credit
D)  All of these are correct.E) A) and D)
F) A) and B)

Question 19

Which graph summarizes inequality visually?

Accepted Answer

A)  Laffer curve
B)  Income inequality curve
C)  Gini curve
D)  Lorenz curveE) B) and D)
F) A) and B)

Question 20

The graph shown displays the Lorenz curves for three societies: A, B, and C.  Which of the following statements is true? The Gini coefficient in Society A is zero.Inequality in Society A is lower than in Society B or C.The Gini coefficient is highest in Society C.

Accepted Answer

A)  I only
B)  II and III
C)  III only
D)  I, II, and IIIE) C) and D)
F) All of the above

Exam 21: Poverty, Inequality, and Discrimination

As of 2015, the Gini coefficient was 34 in Canada and 41.5 in the United States, which indicates that income inequality is:

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Income mobility tells us:

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Which graph summarizes inequality visually?

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The graph shown displays the Lorenz curves for three societies: A, B, and C. Which of the following statements is true? The Gini coefficient in Society A is zero.Inequality in Society A is lower than in Society B or C.The Gini coefficient is highest in Society C.

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Long-term solutions to community-wide poverty must involve:

Correct AnswerverifiedShow Answer

Which of the following is an example of a policy aimed at economic development that would also indirectly impact poverty?

Correct AnswerverifiedShow Answer

Over the last 50 years, the rich have become _______ and the poor have become _______.

Correct AnswerverifiedShow Answer

Evidence shows that children from poor communities typically have _______ opportunities to acquire human capital.

Correct AnswerverifiedShow Answer

Between 1960 and 1995, Social Security benefits _______, which _______ the poverty rate among the elderly.

Correct AnswerverifiedShow Answer

Which region contains the highest percentage of people who live on less than $1.90 a day?

Correct AnswerverifiedShow Answer

To measure income mobility in absolute terms, we would measure whether a person's income:

Correct AnswerverifiedShow Answer

Economists recognize that statistical discrimination:

Correct AnswerverifiedShow Answer

Because the international poverty line is $1.90 a day at purchasing power parity, the poverty line in each country is the amount that will allow you to buy a basket of goods equivalent to what $1.90 would buy in the:

Correct AnswerverifiedShow Answer

The Gini coefficient is calculated by measuring the area between:

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The _______ bowed inward the Lorenz curve is, the _______ inequality exists.

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Aid to Families with Dependent Children was a government program with the goal of:

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Which of the following programs is likely to reduce chronic poverty?

Correct AnswerverifiedShow Answer

Policy that is created with the goal of increasing economic growth often:

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Social insurance programs differ from private insurance programs in that they:

Correct AnswerverifiedShow Answer

In the United States, the official poverty line is calculated by multiplying _______ for a family of a given size by _______.

Correct AnswerverifiedShow Answer

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Over the last 50 years, the rich have become _ and the poor have become _.

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Between 1960 and 1995, Social Security benefits _, which _ the poverty rate among the elderly.

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The _ bowed inward the Lorenz curve is, the _ inequality exists.

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In the United States, the official poverty line is calculated by multiplying _ for a family of a given size by _.

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