Chapter 11 Launchpad Econ

Which of the following is (are) associated with poverty?

adequate employment, education, and proficiency in English

Sometimes healthy people drop their health insurance, leaving only sicker people to buy insurance. This creates a situation known as:

adverse selection

Programs associated with the welfare state are believed to cause deadweight loss, since they:

affect incentives to work and to save.

The adverse selection death spiral occurs when private insurance companies:

charge higher-than-average prices for health insurance, which in turn drives off healthy individuals and leaves only sicker, high-cost individuals, resulting in yet higher premiums the following period.

For the United States in 2012, a Gini coefficient of 0.57 suggests that:

compared to most European countries, the United States has unusually high levels of income inequality.

Becky works for a large grocery store that provides a health insurance program to all workers. This is an example of:

employment-based health insurance.

In the United States in the first two decades following World War II:

income distribution became more nearly equal.

A definition of poverty that compares the individual's level of income with that of other individuals in the country:

is a relative measure.

Compared to a generation ago, benefits from public aid programs, adjusted for inflation, are:

less.

The problem with community rating is that it:

may cause adverse selection.

There are six households in a rural community. Each household earns $40,000 per year. Suppose that a new resident builds a mansion in the community and that the income in the new household is $4 million per year. After the new resident arrives, the median household income has _____ and the mean household income has _____.

not changed; increased

Programs that are not means-tested:

provide benefits for people regardless of income level.

A popular explanation for the most important cause of the increase in income inequality in recent years is:

rapid technological change.

The welfare state can:

take up a large share of government spending in wealthy countries.

Which program was introduced in 1990 to replace the means-tested program Aid to Families with Dependent Children?

temporary assistance to needy families.

Health care in the United States is DIFFERENT FROM that of other wealthy countries in all of the following ways EXCEPT that:

the United States is the only country that provides government health care.

Which of the following is NOT a major cause of poverty in the United States?

welfare