Quiz 12: Income Distribution and Poverty
Which of the following is an in-kind transfer payment?
Medicaid
Which of the following is true of welfare reforms in the United States?
Single mothers who head families have found jobs.
A major social insurance program in the United States is:
Social Security.
As most welfare programs are administered by the federal government, there is uniformity in both eligibility and the dollar value of benefits across states.
false
Economists have no concern that children on welfare might be more likely to end up on welfare as adults.
false
Eligibility for income assistance benefits requires a prior financial contribution from the individual covered; eligibility for social insurance programs does not.
false
In a given population, the median income will always be the same as the average income.
false
In the United States, the median income for households with two earners is lower than that for households with only one earner.
false
In the United States, the poverty rate is highest among young families with a head of household under 25.
false
People on welfare programs who are going to work do not receive food vouchers or Medicaid.
false
Poverty rates are very high along the Northeast corridor from New Hampshire to Virginia.
false
Programs involving mandatory job searches can increase employment, but they involve very high operational costs.
false
Taxes and in-kind transfers make the distribution of income more unequal.
false
The U.S. Census Bureau considers in-kind transfers (such as employer provided benefits) when measuring income.
false
The U.S. poverty rate is higher among households headed by African-American married couples than those headed by white females.
false
The distribution of income among African-American families is more even than it is for the population as a whole.
false
The feminization of poverty has been less in African-American households compared to other households.
false
The income distribution in the United States became more equal between 1980 and 2013.
false
The lower the unemployment rate, the higher the poverty rate.
false
There is much agreement among policy analysts and researchers that the 1996 welfare reform in the United States has failed.
false
The largest drop in the percentage of families below the poverty level occurred:
in the 1960s.
When household incomes are ranked from lowest to highest, the middle income is known as the:
median income.
In a market economy, income depends mostly on:
productivity.
Children of female headed-households are five times more likely to live in poverty than other children.
true
Evidence suggests that spending by quintiles is more evenly distributed than income by quintiles.
true
Firms that are required to participate in affirmative action programs do end up hiring more minority employees.
true
Food stamps are in-kind transfer programs.
true
Generally speaking, the percentage of people living in poverty in the United States is larger in the south than in the north.
true
Government social welfare expenditures have increased more rapidly than other welfare programs since the 60s in the United States.
true
In determining the poverty level, the U.S. Census Bureau understates the actual amount of antipoverty transfers made.
true
In every age group, average income in the United States increases with education.
true
In some cases, welfare benefits can exceed the income earned by workers from full-time employment.
true
On an average, college graduates earn significantly more income than those with less education and the disparity tends to widen into middle age.
true
One of the reasons why household incomes differ is that the number of household members who are working differs.
true
One reason elected officials in U.S. government are sensitive to demands by the elderly is that the elderly have higher voter participation rates than members of other age groups.
true
Poor welfare recipients often face very high marginal tax rates.
true
Recent data on the distribution of income in the United States indicates households in the top fifth of the income distribution earn as much income as the bottom four fifths combined.
true
Since 1970, the number of African-American professionals (e.g., doctors, lawyers) in the labor force has increased dramatically.
true
Social Security and Medicare make up the greatest share of federal redistribution programs since 1959.
true
The 1997 replacement of Aid to Families with Dependent Children with Temporary Assistance for Needy Families was one of the biggest reforms in the welfare system in the United States in the last 70 years.
true
The most recent data on the distribution of income in the United States indicates households in the top fifth of the income distribution earn more than ten times as much income as those in the bottom fifth.
true
The percentage of the U.S. population on welfare has declined after the welfare reforms in 1996.
true
The problem with allocating income according to productivity is that some people would have difficulty earning income.
true
The wage gap between African-American and white workers in the United States has narrowed since 1993.
true
There has been a redistribution of wealth to the elderly in the United States in recent years because public policies in a democracy are determined by the political influence of various interest groups.
true
Transfer payments have reduced poverty among the elderly, but poverty among females has not reduced.
true
When income is distributed perfectly equally in an economy, the Lorenz curve is a 45-degree straight line from the origin.
true
Which of the following is a social insurance program?
unemployment compensation
Social Security was established in the:
1930s to provide retirement income to those with a work history.
Of the following, who would probably have the highest income?
A husband who has a college degree and is a high school teacher and his wife, who has an MBA and works as an insurance company executive
Which of the following is true?
African-American workers receive less on-the-job training than otherwise similar white workers.
Which of the following contributed most to the large increases in poverty since 1960?
An increase in the number of households headed by females
The federal government of the United States has major assistance programs aimed at providing all of the following goods, except one. Which is the exception?
Clothing
Which of the following would not account for the observed wage differential between African Americans and whites in the United States?
Differences in access to public assistance programs
Most states offer _____ to those who are poor but do not qualify for Temporary Assistance for Needy Families (TANF) or Supplemental Security Income (SSI).
General Assistance
Which of the following groups has the fastest-growing population in the United States?
Households headed by female members
Which of the following accounts for approximately three-fourths of all welfare spending?
In-kind transfer
Which of the following programs accounts for nearly a quarter of a typical state's budget in the United States?
Medicaid
The largest welfare program in the United States, costing more than all cash and other in-kind transfer programs combined, is:
Medicaid.
Which of the following is a result of welfare reform?
Most states combined tough new eligibility rules with an expanded menu of welfare services.
Which of the following is not true about income quintiles in the United States?
Only one in three households in the top quintile has anybody working at all.
For which of the following groups has the poverty rate declined most in the United States?
People above 65 years of age
Which of the following is included in the calculation of the official poverty level in the United States?
Pretax money income
Which of the following is not a means-tested program?
Social Security payments to a retiree
Which of the following is not a form of social insurance?
Temporary Assistance for Needy Families
Which of the following groups are not concerned about the special interests of the elderly?
The housing industry
Which of the following is an assumption for the calculation of the poverty level in the United States?
The poor spend about one-third of their income on food.
Which of the following is true of Medicaid?
The proportion of poor people covered by Medicaid varies across states.
Identify the correct statement about the distribution of income in the United States in the last two decades.
The share of income of the highest fifth quantile has increased in the last two decades because of an increase in the number of double-income households.
Identify the correct statement about the supply of labor in the U.S. economy.
The supply of less-educated workers has increased more than the supply of more-educated workers, thus increasing the rewards of education.
Which of the following is true of income assistance programs?
These include both cash and in-kind transfer programs.
Which of the following is true of antipoverty programs?
These programs redistribute income after the market has made an initial distribution.
Which of the following is true of income assistance benefits?
They decrease as earned income increases.
Which of the following is not an example of a "workfare" component in a welfare program?
Tougher child support laws
Under the earned-income tax credit program, ______.
a low-income family would not have to pay federal income tax
A fair distribution of income for the U.S. economy is:
a normative economic question.
Poverty is:
a relative concept.
Census data on the income distribution among families in the United States from 1980 to 2013 show:
a rising share earned by the top fifth and a declining share earned by the bottom fifth.
According to the United States Census Bureau, ______.
a smaller percentage of families are below the poverty level now than in 1960
Over the last forty years, poverty in the United States, as measured by the number of poor, has increased the most:
among households headed by women.
In order to qualify for unemployment insurance and worker's compensation, a person must have:
an employment record.
A major difference between social insurance and income assistance programs is that:
benefits from social insurance programs are related to a worker's work history, whereas benefits from income assistance programs are not.
Temporary Assistance for Needy Families and Supplemental Security Income are:
cash transfers for income assistance.
In the U.S. labor market, _____.
computers have decreased the demand for low-skilled workers and increased the demand for highly-skilled workers
A Lorenz curve shows the:
cumulative percentages of income received by cumulative percentages of households.
Cash transfers made by the U.S. government:
decrease as family income from other sources rises.
The share of the bottom fifth of the population in total income in the last two decades has:
decreased in the United States due to the growth of single-parent households.
Industrial deregulation and a decline in the unionization of the labor force in the United States have:
decreased the pay for workers who have limited education.
Welfare benefits:
discourage poor people from looking for jobs.
In reference to welfare recipients, the high effective marginal tax rate on earnings _____.
discourages self-sufficiency
The Equal Employment Opportunity Commission:
examines cases in which a worker is not paid the same as others performing the same work.
The "workfare" component in welfare programs was introduced to:
expose people to the job market.
The income earned by less-educated workers has decreased primarily because of:
free international trade.
Social Security and Medicare
have succeeded in reducing the incidence of poverty among the elderly.
Social Security and Medicare:
have succeeded in reducing the incidence of poverty among the elderly.
Mary can qualify for benefits under a means-tested transfer payment program if _____.
her household income is below a certain level
Measurement of the official poverty level in the United States:
includes cash transfers but not in-kind transfers.
Transfer programs that do not tie benefits to contributions are called:
income assistance programs.
The official poverty level in the United States is defined as:
income equal to three times the estimated cost of a nutritionally adequate diet.
The increase in the number of poor families in the United States since 1965 can be attributed to a(n):
increase in the number of households headed by females.
In the last 30 years, the number of poor people in the United States in households headed by women has:
increased dramatically.
One feature of the Temporary Assistance for Needy Families (TANF) program is that it:
is controlled by state governments and does not carry any federal entitlement.
The official poverty level in the United States:
is defined by the Department of Agriculture and based on food costs. changes based on family size and inflation.
The U.S. infant mortality rate:
is higher than the mortality rates in other industrialized countries.
Compared to the distribution of money income, the distribution of income that takes into consideration the effects of taxes and in-kind benefits:
is more equal.
The qualifying income level for Medicaid:
is set separately by each state.
The requirement that firms doing business with the federal government set numerical hiring, promotion, and training goals was meant to:
lower the disparity in wages between white and black workers.
The Equal Employment Opportunity Commission was established to:
monitor cases involving unequal access to promotion.
In the United States, the dramatic increase in government social spending since the mid-1960s has:
not greatly increased the money income share of the poorest fraction of the population.
The federal government's earned-income tax credit:
offers cash transfers to the working poor by reducing their taxes.
A problem with official United States poverty data is that it:
omits in-kind transfers such as food stamps.
An increasing fraction of jobs in the U.S. labor market:
pay workers for their productivity using bonus pay and commissions.
Most people on welfare benefit programs in the United States are:
poorly educated and have limited job skills.
An effective government policy for reducing poverty is to:
promote economic growth and job creation.
In the United States, most income comes from:
providing labor resources.
An unintended consequence of an expanded safety net is a(n):
reduction in the incentive to work and earn.
Families primarily receive income from:
resource earnings and transfers payments.
The Lorenz curve for the United States economy has:
shifted further away from the line of equal distribution over the years.
Medicare is a(n):
social insurance program that provides health insurance to people aged 65 years and above, regardless of income.
If income were distributed solely according to marginal productivity, _____.
some individuals would not receive any income
One effect of welfare reform has been a(n):
substantial increase in employment among mothers who head families.
The purpose of social insurance is to:
supplement the incomes of those who have worked but are now retired.
One of the main tools used by economists to measure the actual distribution of income in an economy is:
the Lorenz curve.
Using the Lorenz curve, the degree of income inequality is measured by:
the distance of the Lorenz curve from the line of perfect equality.
Data on the U.S. income distribution suggests that:
the distribution of income among African-American is more uneven than the overall distribution of income.
If the marginal productivity of labor was the sole determinant of household income in the United States, then _____.
the distribution of income would be unequal
A consequence of the "workfare" component in welfare programs was that:
the government saved money because people in this program left welfare sooner.
In a means-tested program, a household qualifies for welfare benefits only if:
the household's income and assets are below a certain level.
When an economy experiences high rates of economic growth and the growth is inclusive is nature, _____.
the income of the families in the bottom of the income distribution is likely to increase
The same households do not necessarily remain rich or poor over time because:
the normal life cycle pattern of income changes over time.
One of the reasons behind the feminization of poverty is that:
the number of people in female-headed households has increased at a faster rate than the number of people in other families.
If the fraction of the population below the official poverty level has decreased,
the number of poor may have increased or decreased.
One of the reasons for the decline in the poverty rate among the elderly can be attributed to:
the political power of the elderly.
If the official U.S. poverty statistics included the effect of in-kind transfer payments, _____.
the poverty rate would be lower
In a market economy, the level of earnings is primarily determined by:
the productivity of resources.
The social insurance system generally redistributes income from:
the rich to the poor and from young to old.
It is difficult to say whether welfare "causes" daughters from welfare families to be more likely to participate in the welfare system themselves. This is because:
the same factors that contribute to a mother's welfare status can also contribute to her daughter's welfare status.
If 15 percent of households receive 15 percent of the total income in an economy, _____.
the slope of the Lorenz curve will be equal to one
Welfare data shows that:
there may be unfavorable long-term consequences of welfare benefits.
Some unintended consequences of income assistance arise because:
these programs are subject to fraud, abuse, and clerical errors.
Data shows that:
those under 18 years of age are the poorest demographic group in the United States.
In the United States, _____.
those who have a professional degree earn almost five times more than those without a high school diploma insurance premiums are deducted from workers' pay to pay for social insurance programs
The Supplemental Nutrition Assistance Program provides:
vouchers that can be redeemed for food.
As welfare rolls declined during the late 1990s and early 2000s, _____.
welfare spending per recipient increased significantly
A preliminary conclusion about welfare reform is that:
work requirements have led to substantial declines in welfare caseloads.
