Poverty + Public Policy midterm

Which of the following will make someone LESS likely to go to college? a. A relative increase in wages of high-school-educated workers b. Being younger c. Availability of loans d. Having a lower discount rate

a. A relative increase in wages of high-school-educated workers

You are a policymaker and want to calculate the present value of the net benefit of the following project proposal. Proposal: A nutrition assistance program that will cost the city $5 million in years 1, 2, and 3. However, it will generate economic benefits of $4 million in year 1, $7 million in year 2, and $8 million in year 3. Suppose the discount rate is 10%. What is the present value of the stream of net benefits over the following 3 years? (Tip: discount the benefits and costs starting with year 1.) a. Approximately $3 million b. Approximately $2 million c. Approximately $5 million d. Approximately $4 million

a. Approximately $3 million

Norton and Ariely (2011) found that: a. People prefer some inequality to no inequality at all b. People prefer that everyone earns the same income c. Which income distribution people prefer largely depends on who they voted for: Kerry or Bush d. People's ideal wealth distribution is NOT very different from what we have now

a. People prefer some inequality to no inequality at all

According to Goldin and Katz: During the first half of the 20th century, ______. However, during the last few decades of the 20th century, ______. a. educational attainment increased faster than technological change; technological change increased faster than educational attainment b. technological change increased faster than educational attainment; educational attainment and technological change increased at the same rate c. technological change increased faster than educational attainment; educational attainment increased faster than technological change d. educational attainment and technological change increased at the same rate; educational attainment increased faster than technological change

a. educational attainment increased faster than technological change; technological change increased faster than educational attainment

The Official Poverty Measure threshold is based on: a. three times the cost of a minimum food diet in the 1960s, adjusted for family size and inflation b. The 33rd percentile of food, clothing, shelter, and utilities expenditures multiplied by 1.2 c. 60% of the median U.S. income d. all of the above

a. three times the cost of a minimum food diet in the 1960s, adjusted for family size and inflation

Question 1 Which of the following statements is true? a.Poverty rate for elderly is less than poverty rate for children b.Poverty rate for high school educated is less than poverty rate for college educated c.Poverty rate for women is less than poverty rate for men d.None of the above

a.Poverty rate for elderly is less than poverty rate for children

Regarding the achievement gap between poor and rich children, Reardon (2011) argues the evidence suggests the gap has widened because: a. The rich are much richer than the poor today relative to the 1970s b. A dollar of income appears to buy more academic achievement today than it did before c. Nowadays, the rich are able to start school at younger ages compared to the poor d. All of the above e. None of the above

b. A dollar of income appears to buy more academic achievement today than it did before

Goldin and Katz argue that the trend in the college wage premium toward the end of the 20th century can be attributed to relatively fast growth in educational attainment, rather than sluggish growth in technologically-driven demand for skilled workers. a. True b. False

b. False

One big difference between poverty and inequality is that poverty is a relative consumption measure in the U.S., whereas inequality is an absolute measure of wealth. a. True b. False

b. False

Skill-biased technological change is when a shift in technology disproportionately increases the supply of skilled workers, thus leading to lower relative wages for skilled workers. a.True b.False

b. False

The GINI coefficient is a measure of ability. a. True b. False

b. False

The Supplemental Poverty Measure primarily differs from the Official Poverty Measure in the U.S. by accounting for which of the following? Taxes b. In-kind benefits (like SNAP and WIC) Inflation Family size

b. In-kind benefits (like SNAP and WIC)

Over the past 40 years, which of the following are true regarding poverty rate and GDP per capita in the U.S.? a. Poverty has risen, GDP per capita has stayed the same b. Poverty has stayed the same, GDP per capita has risen c. Poverty has risen, GDP per capita has fallen d. Poverty has fallen, GDP per capita has fallen e. None of the above

b. Poverty has stayed the same, GDP per capita has risen

*SEE CHART*Using the above income distribution, which of the following answers is the most likely to be correct? a. The median and mean are both $50,000 b. The median is $50,000 and the mean is $25,000 c. The median and mean are both $25,000 d. The median is $25,000 and the mean is $50,000

b. The median is $50,000 and the mean is $25,000

When is selection bias not a problem when evaluating a government program? a. When individuals can choose whether they want to participate b. When individuals are assigned to the program via lottery c. When the program is only offered to low-income families d. When the program staffs trained and certified personnel

b. When individuals are assigned to the program via lottery

Labor market discrimination can be driven by which of the following factors? a. customers b. all of the above c. employers d. co-workers

b. all of the above

Statistical discrimination arises due to: a. prejudice b. valid statistical inference c. invalid statistical inference d. hatred

b. valid statistical inference

*SEE CHART*In each of the above countries, the poverty line is $120,000 and there are a total of 10 citizens. What are the poverty headcount proportions in Countries A and B? a. 40% in A, 30% in B b. 30% in A, 40% in B c. 40% in both d. None of the above

c. 40% in both

Across the entire 20th century (i.e. the 1900s), what happened to wage inequality according to Goldin and Katz? a. it increased at first, remained relatively flat for a couple decades, and then decreased b. it increased throughout c. It decreased at first, remained relatively flat for a couple decades, and then increased d. it decreased throughout

c. It decreased at first, remained relatively flat for a couple decades, and then increased

The costs of college include: a. Opportunity costs b. Direct costs c. Psychic costs d. All of the above

d. All of the above

Which of the following describes how the income distribution in the U.S. has changed over the past 50 years in the U.S.? a. The median has grown faster than the mean b. The mean and the median have both grown at the same pace c. The mean and median have stayed relatively constant over time d. The mean has grown faster than the median

d. The mean has grown faster than the median

Which of the following results do Bertrand and Mullainathan (2004) NOT find evidence of in their correspondence study? a. The racial call-back gap is larger for female applicants to administrative jobs than female applicants to sales jobs. b. The racial call-back gap was roughly the same for men as it was for women in the study. c Across the board, resumes with black-sounding names received fewer call-backs than resumes with white-sounding names. d. There is no racial gap in the call-back advantage associated with applying with a higher-quality resume.

d. There is no racial gap in the call-back advantage associated with applying with a higher-quality resume.

According to Becker's economic theory of discrimination, competitive markets will tend to: a. ensure that racist employers will be more productive than non-racist employers b. allow taste-based discrimination to persist over time c. exacerbate the gaps created by taste-based discrimination d. eliminate taste-based discrimination among employers in the long-run

d. eliminate taste-based discrimination among employers in the long-run

*SEE CHART*In each of the above countries, the poverty line is $120,000 and there are a total of 10 citizens. What are the Poverty Gap Index (PGI) values for Countries A and B? 60 for A, 55 for B ~0.50 for A, ~0.46 for B 55 for A, 60 for B d. ~0.46 for A, ~0.50 for B

d. ~0.46 for A, ~0.50 for B