Question 1

In general, as Americans approach 60 years old, household income _____ and savings ____.

Accepted Answer

A)   falls; fall
B)   falls; rise
C)   rises; fall
D)   rises; riseE) A) and B)
F) A) and C)

Question 2

All of a household's assets measured on a given day are considered the household's income.

Accepted Answer

A) True 
 B)False

Question 3

The biggest fluctuations in income share for functional income distribution since the early 20th century have been associated with corporate profits.

Accepted Answer

A) True 
 B)False

Question 4

Which statement(s)  is/are true?
I. A major source of income inequality in the United States stems from differences in education levels.
II. Differences in the number of earners in a household is not a source of income inequality in the United States.
III. Differences in spending habits is a major factor in explaining income inequality.

Accepted Answer

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

Question 5

If a recently retired professional baseball player had accumulated assets of $15 million but is currently teaching part-time at a local high school for $15,000 a year, then he has

Accepted Answer

A)   low income and high wealth.
B)   low income and low wealth.
C)   high income and high wealth.
D)   high income and low wealth.E) A) and D)
F) C) and D)

Question 6

Poverty thresholds were developed by

Accepted Answer

A)   Corrado Gini.
B)   Max O. Lorenz.
C)   Charles Murray.
D)   Mollie Orshansky.E) B) and D)
F) A) and C)

Question 7

Education is one way to invest in human capital, but it may serve to widen the income gap even further.

Accepted Answer

A) True 
 B)False

Question 8

The Baby Boom generation began retiring in 2011. This should not change the income distribution of the United States.

Accepted Answer

A) True 
 B)False

Question 9

The official World Bank poverty threshold is roughly

Accepted Answer

A)   $2 per day.
B)   $30 per day.
C)   $47 per day.
D)   $120 per day.E) All of the above
F) A) and B)

Question 10

When the income distribution for the United States is adjusted for taxes and transfers, the

Accepted Answer

A)   Lorenz curve shows greater income inequality.
B)   Lorenz curve becomes the line of equal income distribution.
C)   Gini coefficient declines.
D)   Lorenz curve stays the same.E) A) and C)
F) All of the above

Question 11

Discrimination can cause a vicious circle because

Accepted Answer

A)   employees learn to discriminate from their bosses.
B)   once an illegal activity is done, it is easier to keep committing it.
C)   firms then become dependent on underpaid workers.
D)   the lack of high wages reduces the incentives to invest in human capital.E) All of the above
F) C) and D)

Question 12

One issue in deciding how much a government should redistribute income is that excessive redistribution reduces the incentive to work.

Accepted Answer

A) True 
 B)False

Question 13

Income redistribution policies include all of these EXCEPT

Accepted Answer

A)   proportional taxes.
B)   Medicare.
C)   welfare programs.
D)   progressive taxes.E) All of the above
F) B) and D)

Question 14

Which Gini coefficient corresponds to a Lorenz curve that is bowed furthest away from the 45-degree line?

Accepted Answer

A)   0.00
B)   0.35
C)   0.50
D)   0.71E) B) and C)
F) A) and C)

Question 15

Which of these is the MOST significant determinant of income disparity in the United States?

Accepted Answer

A)   inheritance
B)   discrimination
C)   immigration status
D)   individual investment in human capitalE) A) and D)
F) None of the above

Question 16

Which of these is NOT a criticism of the method used to determine poverty in the United States?

Accepted Answer

A)   It does not factor geographic location such as living in urban versus rural areas.
B)   It does not take into account inflation.
C)   It does not take into account the rising costs of health care.
D)   It does not fully take into account differences in family composition.E) All of the above
F) B) and D)

Question 17

The table shows the estimated Gini coefficients for income in four countries. Which has the most equal distribution? Which has the most unequal distribution? What can you conclude about the economy in country B?
 $\begin{array}{|c|c|}
\hline \text { Country } & \text { Gini Coefficient } \
\hline \text { A } & 0.2 \
\hline B & 0 \
\hline \text { C } & 0.5 \
\hline \text { D } & 0.4 \
\hline
\end{array}$

Accepted Answer

A higher Gini coefficient indicates more...

Question 18

(Figure: Distribution of Income)  _____ represents an equal distribution of income.

Accepted Answer

A)   0ac
B)   0bc
C)   0dc
D)   An equal distribution of income is not shown on this graph.E) C) and D)
F) None of the above

Question 19

If the effect of the progressive income tax were to be included, the

Accepted Answer

A)   Lorenz curve would shift to the right.
B)   Lorenz curve would become more bow shaped.
C)   Gini coefficient would get smaller.
D)   Gini coefficient would get larger.E) A) and D)
F) A) and C)

Question 20

Explain how economic discrimination perpetuates a vicious wage circle for its victims.

Accepted Answer

Economic discrimination leads to lower w...

Exam 15: Poverty and Income Distribution

If a recently retired professional baseball player had accumulated assets of $15 million but is currently teaching part-time at a local high school for $15,000 a year, then he has

Correct Answer
verified

Correct Answer
verified
A higher Gini coefficient indicates more...
View Answer

Which of these is the MOST significant determinant of income disparity in the United States?

Correct Answer
verified

In general, as Americans approach 60 years old, household income _ and savings .

Correct Answer
verified

The biggest fluctuations in income share for functional income distribution since the early 20th century have been associated with corporate profits.

Correct Answer
verified

If the effect of the progressive income tax were to be included, the

Correct Answer
verified

(Figure: Distribution of Income) _____ represents an equal distribution of income.

Correct Answer
verified

All of a household's assets measured on a given day are considered the household's income.

Correct Answer
verified

Explain how economic discrimination perpetuates a vicious wage circle for its victims.

Correct Answer
verified
Economic discrimination leads to lower w...
View Answer

Income redistribution policies include all of these EXCEPT

Correct Answer
verified

Which of these is NOT a criticism of the method used to determine poverty in the United States?

Correct Answer
verified

Poverty thresholds were developed by

Correct Answer
verified

One issue in deciding how much a government should redistribute income is that excessive redistribution reduces the incentive to work.

Correct Answer
verified

Correct Answer
verified

The Baby Boom generation began retiring in 2011. This should not change the income distribution of the United States.

Correct Answer
verified

Education is one way to invest in human capital, but it may serve to widen the income gap even further.

Correct Answer
verified

Which Gini coefficient corresponds to a Lorenz curve that is bowed furthest away from the 45-degree line?

Correct Answer
verified

When the income distribution for the United States is adjusted for taxes and transfers, the

Correct Answer
verified

The official World Bank poverty threshold is roughly

Correct Answer
verified

Discrimination can cause a vicious circle because

Correct Answer
verified

Exam 15: Poverty and Income Distribution

If a recently retired professional baseball player had accumulated assets of $15 million but is currently teaching part-time at a local high school for $15,000 a year, then he has

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA higher Gini coefficient indicates more...View AnswerShow Answer

Which of these is the MOST significant determinant of income disparity in the United States?

Correct AnswerverifiedShow Answer

In general, as Americans approach 60 years old, household income _____ and savings ____.

Correct AnswerverifiedShow Answer

The biggest fluctuations in income share for functional income distribution since the early 20th century have been associated with corporate profits.

Correct AnswerverifiedShow Answer

If the effect of the progressive income tax were to be included, the

Correct AnswerverifiedShow Answer

(Figure: Distribution of Income) _____ represents an equal distribution of income.

Correct AnswerverifiedShow Answer

All of a household's assets measured on a given day are considered the household's income.

Correct AnswerverifiedShow Answer

Explain how economic discrimination perpetuates a vicious wage circle for its victims.

Correct AnswerverifiedEconomic discrimination leads to lower w...View AnswerShow Answer

Income redistribution policies include all of these EXCEPT

Correct AnswerverifiedShow Answer

Which of these is NOT a criticism of the method used to determine poverty in the United States?

Correct AnswerverifiedShow Answer

Poverty thresholds were developed by

Correct AnswerverifiedShow Answer

One issue in deciding how much a government should redistribute income is that excessive redistribution reduces the incentive to work.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Baby Boom generation began retiring in 2011. This should not change the income distribution of the United States.

Correct AnswerverifiedShow Answer

Education is one way to invest in human capital, but it may serve to widen the income gap even further.

Correct AnswerverifiedShow Answer

Which Gini coefficient corresponds to a Lorenz curve that is bowed furthest away from the 45-degree line?

Correct AnswerverifiedShow Answer

When the income distribution for the United States is adjusted for taxes and transfers, the

Correct AnswerverifiedShow Answer

The official World Bank poverty threshold is roughly

Correct AnswerverifiedShow Answer

Discrimination can cause a vicious circle because

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
A higher Gini coefficient indicates more...
View Answer

Correct Answer
verified

In general, as Americans approach 60 years old, household income _ and savings .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Economic discrimination leads to lower w...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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