Micro Econ Chapter 15: Poverty and Income Distribution

0ac

(Figure: Distribution of Income) _____ represents an equal distribution of income

the protection of property rights is equitable and just.

A critic of John Rawls would say that:

transfer payments.

All of these are classified as functional distributions of income, EXCEPT

falls; rise

In general, as Americans approach 60 years old, household income _____ and savings ____.

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Of the three line segments shown, which represents the MOST unequal distribution of income?

$30 per day.

The official U.S. poverty threshold is roughly:

not poor.

Households with a ratio of household income to poverty of 2.0 are considered:

poor.

Households with a ratio of income to poverty of 0.8 are considered:

$3,000 The Grant family's income deficit is $5,000. This is determined by subtracting their income from their poverty threshold: $15,000 − $12,000 = $3,000.

If the Grant family earns $12,000 and the poverty threshold for their family is $15,000, what is their income deficit?

poor

If the poverty threshold is approximately $16,000 for a household of three, what would the Census Bureau consider the poverty status of a household of three that earns $12,000?

not poor

Suppose the Grant family earns $20,000 and that the poverty threshold for their family is $15,000. How would this family be classified according to the Census Bureau?

less; more

The income distribution in the United States is generally _____ equally distributed than in European countries and is _____ equally distributed than in many South American countries.

year 3

The table shows the Gini coefficients for one country over four years. Which year shows the MOST unequal income distribution?

an apathy toward work that leads to frequent termination

Traditional causes of poverty include:

Income

A flow is measured over a period of time, while a stock is measured for a point in time.

0.19 A system of taxation of the wealthy and transfer payments to the poor would cause the Gini coefficient to decrease.

The Gini coefficient for the country of Amelia was 0.23 before a system of taxation and transfer payments to the poor was initiated. What could be the likely Gini coefficient after this program was put in place?

created by a joint effort between the individual and community

Those who favor government intervention to reduce income inequality often see personal wealth as:

0.6

Which families with the following income to poverty ratios would be considered "poor"?

Families can move to a higher or to a lower quintile.

Which of the following best describes income mobility in the United States?

globalization Globalization has had the effect of increasing income inequality.

Which of the following has had the effect of making income distribution less equal in the United States?

progressive taxes

Which of the following has had the effect of making income distribution more equal in the United States?

Sweden

According to research by Michael I. Norton and Dan Ariely ("Building a Better America—One Wealth Quintile at a Time," Perspectives on Psychological Science 6 (2011): 9-12), most Americans prefer some income inequality, but less than there is in the United States. This means that they would prefer a distribution more like that of

reduced the estimate of the poverty rate by 25%

By including food stamps and housing subsidies and adjusting for household composition, the Census Bureau has

$155,000 Wealth is a stock measure of an individual's or family's assets, net of liabilities, at a given point in time. Income is a flow that is not used to determine wealth.

Danica earns $45,000 a year working for a big corporation. She also owns corporate stock that is currently valued at $105,000. She has a $150,000 mortgage on a house that's valued at $200,000. Which of the following would represent Danica's wealth?

the lack of high wages reduces the incentives to invest in human capital

Discrimination can cause a vicious circle because

1960-1975

During what period did poverty fall the MOST in the United States?

expansion of the earned income tax credit

In the United States, since the 1970s, which of these is NOT a reason why the Gini coefficient has increased?

the curve would bend closer to the 45-degree line Taxes and transfer payments cause the Lorenz curve to bend closer to the 45-degree line if the wealth is being moved from the wealthier to the less wealthy.

In the fictitious country of Amelia, the government taxes the wealthier residents and gives that tax money to the poorer residents. What would this taxing and transfer payment look like on the Lorenz curve?

an upward-sloping straight line

In the fictitious country of Amelia, the wage earners in each quintile earn 20% of total income. What would be the shape of the Lorenz curve for Amelia?

The distribution of income is more equal in Japan.

The United Nations reports data on income distribution for different countries as a ratio of the income of the richest 10% to the income of the poorest 10%. If the ratio for Japan is 4.5 and the ratio for the United States is 15.9, which of the following statements is correct?

welfare programs

Which of the following has had the effect of making income distribution more equal in the United States?

married-couple households

Which of the following types of families had the lowest total poverty rate in 2014

an increase in the number of manufacturing jobs

Which of these is NOT a cause of income inequality?