Mirco Final
A source of income inequality is ________.
family structure
a flow of money received, often measured on a monthly or an annual basis
income
taking income from those with higher incomes and providing to those with lower incomes
redistribution
The assistance programs from the government that provide assistance to the near-poor and the poor are collectively known as the ________.
safety net
Which of these types of government actions would aggravate a poverty trap?
set a timed deadline to cut off assistance at a certain date whether extra work or income has been achieved
Which of the following determinants are used to define the poverty line?
the cost of basic housing
Potential causes of income inequality in a market economy include which of the following?
If society wishes a high level of economic output it must also accept a high degree of inequality. Conversely, if society wants a high level of equality it must accept a lower level of economic output because of reduced incentives for production
a graph that compares the cumulative income actually received to a perfectly equal distribution of income; it shows the share of population on the horizontal axis and the cumulative percentage of total income received on the vertical axis
Lorenz curve
a tax imposed on the value of an inheritance
estate tax
Which of the following statements is not accurate regarding distribution of income?
Poverty rates cannot change if inequality does not change
Which of the federal government programs gives a set money amount to every state?
TANF
Which of the following are considered anti-poverty government programs under the safety net grouping?
TANF, EITC, SNAP, and Medicare
dividing a group into fifths, a method economists often use to look at distribution of income
quintile
Which of the following accurately describes government food stamps?
There are time limits which are not completely a work hindrance
When anti-poverty programs from the government have declining benefits as people earn higher incomes, this has the possibility of leading to ________.
a poverty trap
What happens with poverty and inequality if high-income and low-income workers have rising incomes, but the incomes increase less for workers who are high-income earners?
both inequality and poverty will decrease
Calculating a(n) ________ can help the government make antipoverty programs such as TANF (the basic welfare program), SNAP (food stamps), Medicaid, and the earned income tax credit (EITC) be more effective.
budget constraint line
The poverty line defines the income needed for a basic standard of living and is determined by ________.
by tripling the inflation-adjusted cost of a minimum food diet from the 1960s and adjusting for other factors such as size of the family composition and ages
Mollie Orshansky officially defined the poverty line in the U.S. based on the ________.
cost of a healthy diet
Economists ________ to study income distribution in an economy.
divide the total number of households into fifths, or quintiles
percentage of total taxes paid divided by total income
effective income tax
Potential causes of income inequality in a market economy include which of the following?
family structure, earning disparity, increased demand for high-skilled jobs
When going over the arguments opposed to government intervention, one states that society must accept a ________ degree of inequality in exchange for if it wishes to have a ________ level of economic output.
high, higher
What are some of the causes of the poverty trap?
in the long run, working provides little financial gain
When one group receives a disproportionate share of total income or wealth than others
income inequality
The effects of a poverty trap can be reduced by ________.
initially decreasing the government payments by smaller amounts
the situation of being below a certain level of income for a basic standard of living
poverty
A specific amount of income needed for a basic standard of living is used to find the ________.
poverty line
the specific amount of income one requires for a basic standard of living
poverty line
percentage of the population living below the property line
poverty rate
antipoverty programs set up so that government benefits decline substantially as people earn more income as a result working provides little financial gain
poverty trap
a tax system in which the rich pay a higher percentage of their income in taxes, rather than a higher absolute amount
progressive tax system
The poverty line is determined by ________.
the level of income needed to cover basic needs
If incomes rise for both low-income and high-income workers, but rise less for the high-income workers,
then poverty will fail and inequality will fail
A Lorenz curve represents the cumulative percentage of total income received along the ________ and the cumulative share of population along the ________.
vertical axis, horizontal axis
the sum of the value of all assets, including money in bank accounts, financial investments, a pension fund, and the value of a home
wealth