Econ 201 inequality practice questions

Which tax is regressive? Arturo pays an 8% tax on the first $9,000 he earns plus _____ tax on any additional income.

5%

Given that the definition of poverty has not been adjusted to reflect the long-term rise in average incomes, one would expect _________ in the percentage of the population living below the poverty line

A decrease

Medicare is provided to:

All Americans age 65 and older and is not means-tested

If a government program is means-tested, it:

Is a poverty program that helps people who have low incomes

When the definition of poverty focuses on relative poverty, a person is in poverty if the household income is:

Is in the bottom 10% of household incomes in the nation

What is a progressive tax system?

It is a system where those with more income pay a higher share of their income in taxes than those with lower incomes

What is social insurance?

It is government-provided financial funding to households to compensate for bad outcomes such as unemployment, illness, disability, or outliving their savings

In-kind transfer example?

Martin receives housing from the government due to his low income

When a welfare program is provided to those whose incomes fall below some minimum level, it is said to be:

Means-tested

When eligibility for a government program is based on income and sometimes on wealth, the program is classified as a _____________ program

Means-tested

A ________ program is one for which the recipient qualifies in the basis of_______.

Means-tested; income

When a poverty line is based on relative poverty, a household is poor if its income is lesser than:

One-half the median household income in the country

The poverty rate is the:

Percent of people whose family income is below the poverty line

An income level below which a family is defined to be in poverty is known as the:

Poverty line

If the poverty line is set at a third of the median household income in the country, the poverty line is based in a _______ poverty standard.

Relative

The poverty line in the US is based on an estimate of:

There times the value of low-cost food for the household

Negative result of redistributing income toward equality

Work incentives are reduced

The poverty line is adjusted each year to reflect

changes in the cost of living

Social security is an _____ that is _____.

monetary transfer; not means-tested

The official poverty line depends on _______ and is adjusted every year to reflect changes in the cost of living

the size and composition of a family

Most Americans receive their health insurance through:

their employer

Which of the following tax systems is progressive? Corrine pays 10% tax on the first $10,000 she earns plus ____ tax on any additional income.

25%

Which if the following gifts is most like an income transfer rather than an in-kind transfer?

A gift card branded through one of the main credit card companies

A regressive tax is a tax where:

Additional income earned is taxed at lower rates as additional income is earned

Food stamps (SNAP) is an example of:

An in-kind transfer

The poverty line is:

An income level determined by the government, below which a family is defined to be in poverty

A progressive tax system is designed so that:

As a persons income rises, a higher tax rate is paid on the extra dollars that are earned