Chapter 18 ECON 202

In 2011, what percent of the U.S population lived in poverty?

15% (In 2011, 15% of the U.S. population lived in poverty, as defined by the government. Consult Table 18-1 to see how this number has changed over time.)

Which of the following is not a reason why it is difficult to reach common agreement on exactly what is meant by fairness and equality?

A large part of our society is not concerned about either equality or fairness. (Most people do care about fairness and equality. Disagreements arise determining what is fair or equal given different circumstances, needs, and work effort.)

If income was distributed equally, the Lorenz curve would:

Be a straight line

Temporary Assistance for Needy Families (TANF) is an expenditure program meant to provide:

Financial assistance to the poor. (Temporary Assistance for Needy Families (TANF) provides temporary financial assistance to needy families with children under the age of 19. It replaced the AFDC program in 1996.)

In the United States, household wealth is:

Less equally distributed than the distribution of family income. (The wealthiest 20% of the population owns about 84.6% of the nation's wealth, while the poorest 40% of the population possesses almost no wealth. See Figure 18-5.)

The Medicaid program in the United States:

Pays the medical expense of the poor. (See definition of Medicaid in your text)

If poverty is defined in absolute terms:

There are comparatively, few people in poverty in the U.S. today. (In absolute terms, many of today's poor live better than the middle class did 60 years ago.)

In 2011, the poverty income threshold level for a family of four was approximately:

$23,000 per year (A family is in poverty if its income is equal to or less than three times an average family's minimum food expenditures as calculated by the U.S. Department of Agriculture. In 2011, this minimum was about $37 per person per week.)

Which of the following lists of countries in the correct order from the most equal distribution of income to the least equal distribution of income?

Sweden, United States, and then Brazil (The U.S. has more income equality than many developing countries (like Brazil, Panama, South Africa, and the Philippines), but less income equality than many developed countries (like Japan, Canada, the United Kingdom, and Sweden). Figure 18-3 compares these three countries.)

Which of the following is not a side effect of redistribution programs as discussed by your text?

Taxes and redistribution programs help stimulate the economy and make it more efficient. (A significant problem with redistribution programs is that they can reward inefficiency and punish efficiency.)