Question 1

Currently over 90 percent of all workers in the United States are covered by Social Security.

Accepted Answer

A) True 
 B)False

Question 2

Insurance companies require male drivers under age 25 to pay higher insurance rates than female drivers under age 25.Craig Raymond,however,is a safer driver than the average female driver under age 25.Craig's higher insurance rate reflects:

Accepted Answer

A)   monopoly power.
B)   statistical discrimination.
C)   the insurance firm's taste for discrimination.
D)   human-capital discrimination.E) B) and C)
F) None of the above

Question 3

In the quintile distribution of income,the term "quintile" represents:

Accepted Answer

A)   5 percent of the income receivers.
B)   10 percent of the income receivers.
C)   20 percent of the income receivers.
D)   25 percent of the income receivers.E) A) and D)
F) A) and C)

Question 4

Wealth:

Accepted Answer

A)   is a flow concept.
B)   refers to accumulated financial assets only.
C)   refers to accumulated real assets only.
D)   refers to accumulated financial and real assets.E) A) and C)
F) A) and D)

Question 5

For which of the following income-maintenance programs is aggregate spending the greatest?

Accepted Answer

A)   Medicare.
B)   Social Security.
C)   Unemployment compensation.
D)   TANF.E) A) and B)
F) B) and D)

Question 6

Which of the following Gini ratios indicates the highest degree of income inequality?

Accepted Answer

A)   0.78.
B)   0.65.
C)   0.29.
D)   0.42.E) A) and C)
F) A) and B)

Question 7

After the implementation of TANF,the U.S.welfare rolls fell by more than one-half between 1996 and 2007.

Accepted Answer

A) True 
 B)False

Question 8

Minority workers are underrepresented and have less access to certain high-paying occupations.This illustrates:

Accepted Answer

A)   human-capital discrimination.
B)   the crowding model.
C)   the taste-for-discrimination model.
D)   statistical discrimination.E) A) and B)
F) All of the above

Question 9

People's incomes are relatively low when they are young,reach a peak in middle age,and then decline.This fact helps explain:

Accepted Answer

A)   the wide variations of Gini ratios among nations.
B)   the equality-efficiency trade-off.
C)   why the lifetime distribution of income is more equal than the distribution in any given year.
D)   why the lifetime distribution of income is less equal than the distribution in any given year.E) B) and C)
F) A) and D)

Question 10

Standard Census data on the distribution of income:

Accepted Answer

A)   take all taxes and transfer payments into account.
B)   are before taxes in that they do not account for personal income and payroll taxes.
C)   include noncash transfers.
D)   exclude cash transfers.E) B) and D)
F) A) and C)

Question 11

Which of the following measurement issues makes interpretation of U.S.poverty rates difficult?

Accepted Answer

A)   Poverty statistics measure income rather than consumption,and some families may be able to consume above the official poverty line.
B)   The high cost of living in rural areas tends to result in the understatement of poverty.
C)   Most people below the poverty line have substantial unreported income.
D)   The poverty rate is adjusted for every urban and rural area,so people's poverty status changes whenever they move.E) None of the above
F) A) and B)

Question 12

Suppose an employer is biased against African Americans.If his discrimination coefficient is $2,the employer will:

Accepted Answer

A)   randomly hire African-American and white workers if the actual African-American-white wage differential is more than $2.
B)   randomly hire African-American and white workers if the actual African-American-white wage differential is less than $2.
C)   hire only African Americans if the actual African-American-white wage differential is less than $2.
D)   hire only whites if the actual African-American-white wage differential is less than $2.E) All of the above
F) A) and C)

Question 13

In the United States since 1975,the poor have gotten poorer and the rich have gotten richer in both relative and absolute terms.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not a social insurance program?

Accepted Answer

A)   TANF (Temporary Assistance for Needy Families) .
B)   Medicaid.
C)   Supplemental Security Income.
D)   Unemployment compensation.E) B) and C)
F) C) and D)

Question 15

The U.S.poverty rate was considerably lower in 2011 than in 1960.

Accepted Answer

A) True 
 B)False

Question 16

Between 1995 and 2007 in the United States:

Accepted Answer

A)   average U.S.household wealth increased and median household wealth declined.
B)   average U.S.household wealth declined and median household wealth increased.
C)   both average and median U.S.household wealth declined.
D)   both average and median U.S.household wealth increased.E) C) and D)
F) B) and D)

Question 17

Answer the question on the basis of the following information.Suppose the members of population A,consisting of Al,Bob,Curt,Doris,and Ellie,receive annual incomes of $5,000,$2,500,$1,250,$750,and $500,respectively. Refer to the given information.What percentage of total income is received by the richest quintile?

Accepted Answer

A)   50.
B)   5.
C)   25.
D)   20.E) B) and C)
F) C) and D)

Question 18

The Gini ratio:

Accepted Answer

A)   measures the relative extent of poverty in a nation.
B)   compares the income of persons,households,or households at the 90th percentile of the income distribution to the income at the 10th percentile.
C)   is a numerical measure of the overall dispersion of income in a nation.
D)   is found by dividing the entire area below and to the right of the diagonal in the Lorenz diagram by the area between the diagonal and Lorenz curve.E) B) and D)
F) A) and D)

Question 19

Gomez argues that we need to increase the nation's output.Chang contends that our top priority should be a more equal distribution of income and output.It can be correctly stated that these two goals are:

Accepted Answer

A)   essentially unrelated.
B)   complementary because the realization of one will promote fulfillment of the other.
C)   at least partially competing because the redistribution of income might impair incentives to work and produce.
D)   complementary because a more equal distribution of income always promotes economic growth.E) A) and C)
F) C) and D)

Question 20

Housing subsidies for low-income households:

Accepted Answer

A)   represent a cash transfer.
B)   are a part of the U.S.social insurance programs.
C)   represent a noncash transfer.
D)   conflict with the leaky-bucket analogy.E) A) and B)
F) None of the above

Exam 22: Income Inequality Poverty and Discrimination

Which of the following is not a social insurance program?

Correct Answer
verified

Wealth:

Correct Answer
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People's incomes are relatively low when they are young,reach a peak in middle age,and then decline.This fact helps explain:

Correct Answer
verified

Minority workers are underrepresented and have less access to certain high-paying occupations.This illustrates:

Correct Answer
verified

Between 1995 and 2007 in the United States:

Correct Answer
verified

For which of the following income-maintenance programs is aggregate spending the greatest?

Correct Answer
verified

The U.S.poverty rate was considerably lower in 2011 than in 1960.

Correct Answer
verified

Housing subsidies for low-income households:

Correct Answer
verified

Which of the following measurement issues makes interpretation of U.S.poverty rates difficult?

Correct Answer
verified

Standard Census data on the distribution of income:

Correct Answer
verified

In the quintile distribution of income,the term "quintile" represents:

Correct Answer
verified

The Gini ratio:

Correct Answer
verified

After the implementation of TANF,the U.S.welfare rolls fell by more than one-half between 1996 and 2007.

Correct Answer
verified

Which of the following Gini ratios indicates the highest degree of income inequality?

Correct Answer
verified

Correct Answer
verified

In the United States since 1975,the poor have gotten poorer and the rich have gotten richer in both relative and absolute terms.

Correct Answer
verified

Gomez argues that we need to increase the nation's output.Chang contends that our top priority should be a more equal distribution of income and output.It can be correctly stated that these two goals are:

Correct Answer
verified

Suppose an employer is biased against African Americans.If his discrimination coefficient is $2,the employer will:

Correct Answer
verified

Currently over 90 percent of all workers in the United States are covered by Social Security.

Correct Answer
verified

Insurance companies require male drivers under age 25 to pay higher insurance rates than female drivers under age 25.Craig Raymond,however,is a safer driver than the average female driver under age 25.Craig's higher insurance rate reflects:

Correct Answer
verified

Exam 22: Income Inequality Poverty and Discrimination

Which of the following is not a social insurance program?

Correct AnswerverifiedShow Answer

Wealth:

Correct AnswerverifiedShow Answer

People's incomes are relatively low when they are young,reach a peak in middle age,and then decline.This fact helps explain:

Correct AnswerverifiedShow Answer

Minority workers are underrepresented and have less access to certain high-paying occupations.This illustrates:

Correct AnswerverifiedShow Answer

Between 1995 and 2007 in the United States:

Correct AnswerverifiedShow Answer

For which of the following income-maintenance programs is aggregate spending the greatest?

Correct AnswerverifiedShow Answer

The U.S.poverty rate was considerably lower in 2011 than in 1960.

Correct AnswerverifiedShow Answer

Housing subsidies for low-income households:

Correct AnswerverifiedShow Answer

Which of the following measurement issues makes interpretation of U.S.poverty rates difficult?

Correct AnswerverifiedShow Answer

Standard Census data on the distribution of income:

Correct AnswerverifiedShow Answer

In the quintile distribution of income,the term "quintile" represents:

Correct AnswerverifiedShow Answer

The Gini ratio:

Correct AnswerverifiedShow Answer

After the implementation of TANF,the U.S.welfare rolls fell by more than one-half between 1996 and 2007.

Correct AnswerverifiedShow Answer

Which of the following Gini ratios indicates the highest degree of income inequality?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the United States since 1975,the poor have gotten poorer and the rich have gotten richer in both relative and absolute terms.

Correct AnswerverifiedShow Answer

Gomez argues that we need to increase the nation's output.Chang contends that our top priority should be a more equal distribution of income and output.It can be correctly stated that these two goals are:

Correct AnswerverifiedShow Answer

Suppose an employer is biased against African Americans.If his discrimination coefficient is $2,the employer will:

Correct AnswerverifiedShow Answer

Currently over 90 percent of all workers in the United States are covered by Social Security.

Correct AnswerverifiedShow Answer

Insurance companies require male drivers under age 25 to pay higher insurance rates than female drivers under age 25.Craig Raymond,however,is a safer driver than the average female driver under age 25.Craig's higher insurance rate reflects:

Correct AnswerverifiedShow Answer

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