MACRO Econ Chapter 8: Inequality, Social Insurance, and Redistribution

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

It is estimated that 90 percent of the money that is being redistributed is lost to "leaks" such as administrative costs. If $25,000 is redistributed from a family in the highest quintile (earning $190,000) to a family in the lowest quintile (who earned only $15,000), how much money will actually be received by the family in the lowest quintile?

$2,500 (0.1 * 25000)

_____ judges the adequacy of resources relative to an unchanging standard.

Absolute poverty

Which of the following is TRUE about a spell of poverty?

Around half of spells of poverty last less than a year.

How do you find the distribution of income?

Find how much people in each equal-sized income group receive as a share of total income.

Which of the following is NOT considered a cost of redistribution?

Income redistribution

The elderly and the disabled are protected by:

Supplemental Security Income.

When equality is measured in terms of outcomes, more equal outcomes:

are fairer.

Because the private insurance market _____ that everyone can get certain forms of insurance, the government steps in and social insurance is provided by _____.

fails to ensure; taxpayers

Some safety net programs are _____ because they are insurance programs designed to cover everyone—the rich and the poor.

not means-tested

The taxes that fund most social insurance programs are _____ in which we all pay the same percentage of our income regardless of whether we earn a little or a lot.

proportional taxes

When children lose a parent, they receive Social Security benefits to help support them until they turn 18. This means that Social Security:

provides life insurance to parents.

Data shows that the United States has less intergenerational mobility than Germany. That means that:

the success of U.S. children depends more on parents' economic status than the success of German children does.


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