Inequality and Public Policy Quiz Q's

[The Great Divergence] The top 10 percent in the U.S. are "the Sort of Rich." How much do these people make annually?

$100,000 or more

[The Haves and the Have-nots] In Pride and Prejudice, the family of Elizabeth Bennett probably belonged to the top [INSERT ANSWER] percent of the English income distribution at the time.

1

According to "Can the Middle Class Be Saved?", the U.S. agricultural industry is now so mechanized that only about [INSERT ANSWER] percent of American

2

Standard error is a measure of the statistical accuracy of an estimate. If the coefficient estimate is 4, what is the approximate maximum allowable standard error to pass a typical test for statistical significance?

2

Given IQ scores are approximately normally distributed with a mean of 100 and standard deviation of 15, the proportion of people with IQs above 130 is:

2.5%

An annual growth rate of 1.0% is equal to a 30-year growth rate of approximately [INSERT ANSWER].

35%

If the nominal growth rate is 5 percent per year, and prices increase by 1 percent, then we say that the real growth rate is [INSERT ANSWER] percent.

4

The Netherlands did not cross the 2-percent mobilization threshold during World War II while the US did mobilize more than 2 percent of its population. Supposed that the US tax rate increased by 60 percent from 1943 to 1945 while the Dutch tax rate increased by only 10 percent. According to the difference-in-differences approach, what is the effect of war mobilization on the tax rate?

50

[The Great Divergence] On average, the top 0.1 percent (The Stinking Rich) in the U.S. earn about $ [INSERT ANSWER] per year.

7 million

In 2012, which of the following continents had the largest population?

Asia

According to Albertus and Menaldo, which of the following exemplifies a transition from an oligarchic autocracy to an elite-biased democracy?

Chile

Humans were able to achieve food surpluses through plat and animal [INSERT ANSWER]

Domestication

According to "Can the Middle Class Be Saved?", the Great Recession lowered the level of inequality between the rich and the poor because the rich incurred tremendous losses in the financial market.

False

According to Jared Diamond, if an observer traveled back in time to 11,000 B.C., they would have predicted that Europe was destined to become an industrial powerhouse.

False

According to Jared Diamond, the Great Leap Forward coincided with the 19th century Industrial Revolution in England.

False

Jared Diamond believes that differences in wealth across the globe are primarily produced by geography.

False

Jared Diamond believes that there have been many inventors without whom the broad course of world history would have been altered significantly.

False

Life expectancy in 1800 A.D. was about 40-50 years at birth.

False

Marx saw the market as a self-regulated system, that is, a system capable of achieving equilibrium on its own without major deviations.

False

Most areas of the world developed food production independently, giving rise to a number of distinct civilizations across the globe.

False

The author of "A Farewell to Alms," Gregory Clark uses the "Great Divergence" to indicate income inequality within a country, rather than between countries.

False

[The Great Divergence] Discrimination based on race and gender can primarily explain why the U.S. has become increasingly unequal since the 1980s.

False

[The Great Divergence] Scholars generally agree that low-skill immigration from Latin America into the U.S. has been primarily responsible for the Great Divergence between the rich and the poor in the U.S.

False

Between 1920 and 1950, among the following countries, which had the lowest market value of private capital as a percentage of national income?

Germany

In 1799, which country introduced the first tax resembling a modern income tax due to the threat of Napoleon Bonaparte's armies?

Great Britain

(Saez) During the [INSERT ANSWER] , average real income per family declined dramatically by 17.4%

Great Recession (2007-2009)

[The Haves and the Have-nots] Who was the richest person ever?

John D. Rockefeller

[The Haves and the Have-nots] This Russian-American economist/statistician posited that as industrialization takes place and people move from agriculture into industry, inequality between industrial workers and farmers rises. What was his last name?

Kuznets

What is the tax rate on the last dollar earned?

Marginal Tax Rate

The coefficient of variation (%) is standard deviation divided by [INSERT ANSWER] multiplied by 100.

Mean

According to "Can the Middle Class Be Saved?", which of the following is true about men?

Men have been less likely to pursue higher education or service job over the past 30 years.

Where did Jared Diamond do most of his fieldwork?

New Guinea

[The Haves and the Have-nots] Based on a limited sample of the late-nineteenth-century tax data from European countries and cities, this Franco-Italian economist believed in an "iron law of inter-personal inequality" which is popularly known as the 80/20 law. What was his last name?

Pareto

According to "The Rise of the New Global Elite," the world is dividing into two blocs, the [INSERT ANSWER] and the rest.

Plutonomy

[The Great Divergence] This U.S. president took multiple measures that contributed to the beginning of the Great Divergence. What was the president's last name?

Reagan

According to "The Rise of the New Global Elite," the super-elite, particularly oligarchs from this country, can be oblivious and indifferent to the suffering of others as one of them famously said "If a man is not an oligarch, something is not right with him."

Russia, Mikhail Khodorkovscy

Jared Diamond outlines the evolution of societies from bands to [INSERT ANSWER]. What is this ultimate form of society called? It has many villages and cities with centralized authority, laws, and judges.

States

Which of the following countries did not cross the 2-percent threshold of mass mobilization during World War II?

Sweden

This disk's signs were punched into soft clay by a set of at least 45 stamps. This disk is believed to be humanity's first recorded attempt at printing. Where is this disk from?

The ancient Minoan palace at Phaistos on the island of Crete

According to "The Rise of the New Global Elite," which of the following is false about today's rich?

They are born rich and know what it is to possess and enjoy early.

According to "Bones of Contention," on average, people from Ohio were taller than Southerners in the mid-nineteenth century US.

True

According to "Bones of Contention," pre-agrarian humans before the early Neolithic period were taller than humans from the late Neolithic period.

True

According to "Bones of Contention," the level of inequality within a Native American tribal community was generally low in terms of heights.

True

[The Haves and the Have-nots] Anna Karenina's lover, Count Vronsky, was wealthier than Anna's husband, Alexei Karenin.

True

For English-speaking countries, the top income shares (percentile and decile) exhibit a [INSERT ANSWER] -shaped trend over the last century.

U

Compared to the 1950s, which of the following countries' top one-percent income increased substantially in the early 2000s?

UK

[The Great Divergence] According to the author's crude calculation, which of the following is most responsible for the Great Divergence?

Various failures in our education system

What is standard deviaton?

a measure of the amount of variation or dispersion of data

[Shadowy Lines That Still Divide] One way to think of a person's position in society is to imagine a hand of cards. Everyone is dealt four cards. Which of the following is NOT mentioned in the article?

attractiveness

Which of the following samples does the empirical analysis in Dorr & Shin (2020) use?

both cross-national and US senate voting

According to Scheve and Stasavage (2017), Democracy may be______ if the rich who see their de jure power eroded by democratization invest in de facto power (e.g., lobbying, etc.).

captured

Between the 1910s and 1920s, the top [INSERT ANSWER] claimed as much as 45 to 50 percent of national income in the U.S.

decile

Hunter-gatherer societies tend to be relatively [INSERT ANSWER]. Jared Diamond mentions two types of specialists who merged in sedentary societies: kings and [INSERT ANSWER].

egalitarian, bureaucrats

Which of the following measures is more volatile?

exchange rate euro/ dollar

According to "The Rise of the New Global Elite," American elites became grateful and remained loyal to the Obama administration for providing them with a $700 billion bailout.

false

According to Dorr & Shin (2019), most British aristocrats retained their wealth during World War I.

false

According to Scheve and Stasavage (2017), existing data support the idea that wealth inequality impedes democracy.

false

According to Scheve and Stasavage (2017), there is ample support for the idea that higher land inequality means less democracy throughout 1970-1989 and 1990-2009.

false

According to the results provided by Scheve and Stasavage (2012), there is ample evidence that GDP per capita influences the inheritance tax rate.

false

In 2007, capital gains accounted for a very small portion of income for the top 0.1 percent income composition.

false

In Scheve and Stasavage (2012)'s "Democracy, War, and Wealth," they find that once countries hold competitive elections, their tax rates increase.

false

In both their 2010 and 2012 articles, Scheve and Stasavage conclude that universal suffrage is an important explanatory variable capable of explaining the variation in the dependent variable.

false

In terms of the share of total employment, the French service sector dominated the French economy while the U.S. agricultural industry constituted a major share of the American economy in 2012.

false

Over the past century, factor shares in the corporate sector have been more volatile than fluctuations in the top income shares.

false

Ricardo had genuine statistics at his disposal to analyze the long-term evolution of land prices and land rents.

false

Scheve and Stasavage argue that wars of mass mobilization lead to more taxation because wars are expensive and need to be financed.

false

Shocked by the scenes of extreme poverty in the French countryside, Arthur Young thought that a revolutionary upheaval was the solution to the French inequality.

false

[Piketty & Saez] According to the authors, the Tax Reform Act of 1986 (TRA86) produced a permanent surge in top income shares.

false

[Piketty & Saez] According to the authors, the huge increase in top wage shares since the 1970s is the sole consequence of technical change.

false

[Piketty & Saez] The authors say that Kuznets' hypothesis is no longer of academic interest.

false

[Piketty & Saez] The modern U.S. income tax began in 1970.

false

According to Albertus and Menaldo, which of the following political changes does NOT change the level of inequality significantly?

fro oligarchic dictatorship to gamed democracy

Which of the following political transitions leads to the largest reduction in inequality over time?

from oligarchic dictatorship to popular democracy

[INSERT ANSWER 1] is the total annual value of goods and services produced within the borders of a given country. [INSERT ANSWER 2] accounts for the depreciation of capital and includes net income received from abroad.

gross domestic product, national income

What is the dependent variable in Scheve and Stasavage (2010)'s "The Conscription of Wealth?"

income taxation

Which independent variable does Dorr & Shin (2020) consider in addition to those mentioned in Scheve and Stasavage (2010; 2012)?

inequality

What is the dependent variable in Scheve and Stasavage (2012)'s "Democracy, War, and Wealth?"

inheritance tax

[Shadowy Lines That Still Divide] [INSERT ANSWER] is the promise that lies at the heart of the American dream. It is supposed to take the sting out of the widening gulf between the have-mores and the have-nots."

mobility

The average estate of top 0.01% decedents in 1996 was worth [INSERT ANSWER]

more than $100 million

In Farewell to Alms, Gregory Clark argues that the average inhabitant in the world of 1800 A.D. was [INSERT ANSWER] than the average person of 100,000 B.C.

no better off

(Saez) The tax change announced to take effect in 2013 created strong incentives to [INSERT ANSWER] income to take advantage of the lower top tax rates in 2012 relative to 2013 and after for tax [INSERT ANSWER]

retime, advance

According to Dorr & Shin (2019), inequality indicates [INSERT ANSWER].

the power disparity between the rich and the poor

According to Scheve and Stasavage (2017), which of the following variables best explains wealth inequality trends?

the volatility of the real return on capital

According to Albertus and Menaldo, Paraguay and Bolivia did NOT change their tax structures significantly in the wake of mass-mobilizing war.

true

Following the massive evaporation of landed wealth during WWI, UK government policies became more hostile toward aristocrats.

true

For individuals in the top 0.5 percent, their capital income as a share of their entire income is substantially lower today than 100 years ago.

true

The dramatic growth in top incomes during the Clinton administration did NOT generate much public outcry because the average real annual growth rate was high (4.0%).

true

The top 1 percent share measured by the Current Population Survey (CPS) is consistently lower than the top 1 percent shares constructed by Piketty and his team.

true

The top income share series developed by Piketty and his co-authors were constructed using tax statistics, not household surveys.

true

[Bartels Chapter 1] Cumulative income growth rates between 1946 and 1974 were higher than those between 1974 and 2014 for all income groups.

true

[Bartels Chapter 1] Democratic and Republican presidents since the late 1940s have presided over dramatically different patterns of income growth.

true

[Bartels Chapter 1] Ordinary American citizens in the bottom one-third of the income distribution have NO discernible impact on the voting behavior of their senators.

true

[Bartels Chapter 1] Repealing the estate tax has been remarkably popular among ordinary American citizens, regardless of their political views and economic circumstances.

true

[Bartels Chapter 1] Republicans have been largely successful in the American electoral arena despite their tendency to decrease the economic fortunes of middle-class and poor people.

true

[Bartels Chapter 1] The increasing share of income going to people in the top 5% of the distribution is almost entirely accounted for by the increasing share going to the top 1%.

true

[Bartels Chapter 1] The views of ordinary American citizens about the eroding minimum wage have had remarkably little impact on public policy.

true

[Piketty & Saez] Before 1944, only a small fraction of individuals had to file tax returns.

true

[Shadowy Lines That Still Divide] At 250 of the most selective colleges in the country, the proportion of students from upper-income families has grown, not shrunk.

true

In Scheve and Stasavage (2012)'s "Democracy, War, and Wealth," they use [INSERT ANSWER] to characterize the level of democracy.

universal male suffrage

The analysis in Dorr & Shin (2020) considers three dependent variables. Which one of the following is NOT one of the dependent variables?

universal male suffrage

According to Atkinson, Piketty, and Saez, which of the following can best explain the variation in the top income shares?

war and financial crises