Question 1

The United States has a slightly _____ poverty rate and _____ income inequality than other large, highly developed economies such as Germany and Japan.

Accepted Answer

A)   higher; higher
B)   higher; lower
C)   lower; lower
D)   lower; higherE) B) and D)
F) A) and B)

Question 2

A quintile is

Accepted Answer

A)   equal to 25%.
B)   a method of dividing a sample population into equal portions.
C)   a Gini coefficient.
D)   a statistical unit that represents one fifth (20%)  of a given population.E) C) and D)
F) B) and C)

Question 3

The _____ begins with the first dollar of earned income and increases with greater earnings until the maximum benefit is reached.

Accepted Answer

A)   Supplemental Nutrition Assistance Program
B)   earned income tax credit
C)   Temporary Assistance for Needy Families program
D)   housing assistance programE) B) and C)
F) A) and D)

Question 4

The _____ is a graphical presentation of the cumulative distribution of income or wealth.

Accepted Answer

A)   Gini-Lorenz coefficient
B)   income quintile
C)   Gini coefficient
D)   Lorenz curveE) B) and C)
F) A) and D)

Question 5

(Figure: Lorenz Curve 0)  In the figure, income inequality increases if area _____ gets _____.

Accepted Answer

A)   A; larger
B)   B; larger
C)   C: larger
D)   A; smallerE) B) and D)
F) B) and C)

Question 6

The Lorenz curve is:

Accepted Answer

A)   another name for the Gini-Lorenz coefficient.
B)   another name for the Gini coefficient.
C)   a graphical presentation of the cumulative distribution of income or wealth.
D)   a method of studying quintiles.E) A) and B)
F) A) and C)

Question 7

_____ is the percentage of the population with incomes that are below the poverty line.

Accepted Answer

A)   Social insurance
B)   The poverty threshold
C)   Social income
D)   The poverty rateE) All of the above
F) A) and C)

Question 8

_____ is the net value of all assets less any debts owed.

Accepted Answer

A)   Net income
B)   Money
C)   Wealth
D)   Disposable incomeE) B) and D)
F) A) and B)

Question 9

Sally, a low-income worker, is asked by her supervisor to work extra hours and earn an extra $75 a week. Her taxes will increase by $10, and her government benefits will be reduced by $40. How much better off will Sally be with this extra income?

Accepted Answer

A)   $75
B)   $65
C)   $35
D)   $25E) B) and C)
F) A) and B)

Question 10

Bart, a low-income worker, is asked by his supervisor to work extra hours and earn an extra $125 a week. His taxes will increase by $30, and his government benefits will be reduced by $40. How much better off will Bart be with this extra income?

Accepted Answer

A)   $125
B)   $95
C)   $85
D)   $55E) A) and D)
F) B) and C)

Question 11

_____ is the amount of additional taxes that one pays from an additional dollar of income.

Accepted Answer

A)   Marginal analysis
B)   Implicit marginal analysis
C)   The implicit marginal tax rate
D)   The marginal tax rateE) B) and C)
F) A) and C)

Question 12

Since 1976, the share of income that goes to the top one percent of earners has risen dramatically. What two facts stand out when examining this group?

Accepted Answer

Two facts stand out when examining earne...

Question 13

In 2016, the lowest quintile of households received _____% of income, and the highest quintile received _____% of income.

Accepted Answer

A)   11.4; 37.1
B)   3.1; 37.1
C)   11.4; 51.5
D)   3.1; 51.5E) C) and D)
F) All of the above

Question 14

The earned income tax credit is a government:

Accepted Answer

A)   subsidy.
B)   in-kind payment.
C)   rental assistance program.
D)   work program.E) All of the above
F) None of the above

Question 15

High-income households are increasingly likely to be families with two earners, according to the _____ factor, influencing the widening income inequality gap.

Accepted Answer

A)   skills-based economy
B)   single-parent household
C)   dual-income household
D)   globalizationE) A) and D)
F) A) and C)

Question 16

The highest quintile is the top ____% of households.

Accepted Answer

A)   50
B)   25
C)   20
D)   10E) C) and D)
F) None of the above

Question 17

(Figure: Lorenz Curve)  In the figure, the Lorenz curve representing the deviation from perfect income equality is:

Accepted Answer

A)   A.
B)   B.
C)   C.
D)   D.E) A) and B)
F) A) and C)

Question 18

The _____ poverty rate adjusts income for taxes and subsidies.

Accepted Answer

A)   federal
B)   official
C)   after-tax
D)   consumption use of goods and servicesE) None of the above
F) C) and D)

Question 19

Several studies show that over half the families in the bottom quintile during a given year move up to a higher quintile _____ years later.

Accepted Answer

A)   five
B)   10
C)   15
D)   20E) C) and D)
F) B) and C)

Question 20

The Gini coefficient is:

Accepted Answer

A)   another name for the Gini-Lorenz coefficient.
B)   another name for the Lorenz curve.
C)   a measurement of relative income or wealth inequality.
D)   a method of studying quintiles.E) A) and D)
F) C) and D)

Exam 18: The Distribution of Income

The _____ is a graphical presentation of the cumulative distribution of income or wealth.

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The _____ poverty rate adjusts income for taxes and subsidies.

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_____ is the amount of additional taxes that one pays from an additional dollar of income.

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A quintile is

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The Gini coefficient is:

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High-income households are increasingly likely to be families with two earners, according to the _____ factor, influencing the widening income inequality gap.

Correct AnswerverifiedShow Answer

The _____ begins with the first dollar of earned income and increases with greater earnings until the maximum benefit is reached.

Correct AnswerverifiedShow Answer

The earned income tax credit is a government:

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Since 1976, the share of income that goes to the top one percent of earners has risen dramatically. What two facts stand out when examining this group?

Correct AnswerverifiedTwo facts stand out when examining earne...View AnswerShow Answer

(Figure: Lorenz Curve) In the figure, the Lorenz curve representing the deviation from perfect income equality is:

Correct AnswerverifiedShow Answer

Bart, a low-income worker, is asked by his supervisor to work extra hours and earn an extra $125 a week. His taxes will increase by $30, and his government benefits will be reduced by $40. How much better off will Bart be with this extra income?

Correct AnswerverifiedShow Answer

In 2016, the lowest quintile of households received _____% of income, and the highest quintile received _____% of income.

Correct AnswerverifiedShow Answer

The Lorenz curve is:

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_____ is the percentage of the population with incomes that are below the poverty line.

Correct AnswerverifiedShow Answer

Several studies show that over half the families in the bottom quintile during a given year move up to a higher quintile _____ years later.

Correct AnswerverifiedShow Answer

The United States has a slightly _____ poverty rate and _____ income inequality than other large, highly developed economies such as Germany and Japan.

Correct AnswerverifiedShow Answer

_____ is the net value of all assets less any debts owed.

Correct AnswerverifiedShow Answer

(Figure: Lorenz Curve 0) In the figure, income inequality increases if area _____ gets _____.

Correct AnswerverifiedShow Answer

Sally, a low-income worker, is asked by her supervisor to work extra hours and earn an extra $75 a week. Her taxes will increase by $10, and her government benefits will be reduced by $40. How much better off will Sally be with this extra income?

Correct AnswerverifiedShow Answer

The highest quintile is the top ____% of households.

Correct AnswerverifiedShow Answer

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Two facts stand out when examining earne...
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In 2016, the lowest quintile of households received _% of income, and the highest quintile received _% of income.

Correct Answer
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The United States has a slightly _ poverty rate and _ income inequality than other large, highly developed economies such as Germany and Japan.

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(Figure: Lorenz Curve 0) In the figure, income inequality increases if area _ gets _.

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