SSS 101 Chapter 9 Midterm

1. We wish to compare the income distribution in two countries using a Gini coefficient. If Country A has a Gini coefficient of .197, which of the following would indicate a country with a more equal distribution? a) .123 b) .197 c) .450 d) Gini coefficients cannot be compared between countries

a) .123

If income were distributed equally in this country, the Lorenz curve would be: a) A diagonal line rising from left to right. b) A horizontal line. c) A vertical line. d) A diagonal line decreasing from left to right.

a) A diagonal line rising from left to right.

1. Which of the following statements is true of how liberals view fiscal inequality? a) The growth of inequality is getting worse and this is a result of unjust social and economic pressures. b) Some levels of inequality in the United States have benefits as the wealthy invest their incomes and take financial risk that can create employment for others. c) Both A and B d) Neither A nor B

a) The growth of inequality is getting worse and this is a result of unjust social and economic pressures.

1. The Lorenz Curve is a) a curve that shows the percentage of total household incomes received by successively larger fractions of the population, starting with the poorest group. b) a curve that shows the area between the Gini Curve and line OE, divided by OEZ. c) Both A and B d) Neither A nor B

a) a curve that shows the percentage of total household incomes received by successively larger fractions of the population, starting with the poorest group.

1. An absolute definition of poverty is: a) a relatively fixed level of income above which a person cannot function in a productive and efficient manner in a given society. b) poverty is viewed as relative to the wealth of the rest of society. c) Both A and B d) Neither A nor B

a) a relatively fixed level of income above which a person cannot function in a productive and efficient manner in a given society.

Definitions of poverty based on calculations derived from minimum costs of food, housing, clothing and transportation are: a) absolute definitions. b) cultural definitions. c) relative definitions. d) dictionary definitions.

a) absolute definitions.

1. If income were distributed equally in this country, every household would have received about how much in 2005? a) $50,000 b) $85,000 c) $150,000 d) $518,000

b) $85,000

What proportion of people who are classified as poor during this year are likely to be so classified next year? a) 40% b) 50% c) 60% d) 70%

b) 50%

1. Which of the following statements is true of how conservatives view fiscal inequality? a) The growth of inequality is getting worse and this is a result of unjust social and economic pressures. b) Some levels of inequality in the United States have benefits as the rich invest their incomes and take financial risk that can create employment for others. c) Both A and B d) Neither A nor B

b) Some levels of inequality in the United States have benefits as the rich invest their incomes and take financial risk that can create employment for others.

When poverty is defined as both a lack of money and as a lifestyle, it is a: a) relative definition. b) cultural definition. c) absolute definition. d) all of the above.

b) cultural definition.

Liberals criticize trickle-down theory because: a) no amount of inequality is acceptable. b) inequality is increasing, but the number of people below the poverty line has remained the same. c) social efficiency could be attained with less inequality. d) all of the above.

b) inequality is increasing, but the number of people below the poverty line has remained the same.

1. A relative definition of poverty is a) a relatively fixed level of income above which a person cannot function in a productive and efficient manner in a given society. b) poverty is viewed as relative to the wealth of the rest of society. c) Both A and B d) Neither A nor B

b) poverty is viewed as relative to the wealth of the rest of society.

The bottom 20% of the population in the United States receives: a) 5% of the income. b) 20% of the income. c) 3.1% of the income. d) 10% of the income.

c) 3.1% of the income.

In 2015, the top 1% of families in the United States owned: a) 10% of all privately held wealth. b) 25% of all privately held wealth. c) 35% of all privately held wealth. d) 40% of all privately held wealth.

c) 35% of all privately held wealth.

How many Americans are living below the poverty line? a) 1 million b) 28 million c) 40 million d) 103 million

c) 40 million

1. Which statement is more accurate? a) The top 1% of families own nearly 35% of all privately held wealth. b) The bottom 17% of the population own nothing at all. c) Both A and B d) Neither A nor B

c) Both A and B

When exploring if non-cash benefits should be counted, a) conservatives argue that in-kind benefits should be counted as income. b) liberals argue that in-kind benefits should be considered when we define and measure poverty. c) Both A and B d) Neither A nor B

c) Both A and B

What proportion of poor families is headed by women? a) 10% b) 25% c) 40% d) 50%

d) 50%

Liberals argue that wealth and income inequality is bad for the overall population as a) It lowers economic growth b) It reduces government tax revenues c) It undermines overall educational opportunities d) All of the above

d) All of the above

When exploring if the poverty line should be based on net disposable income, a) the growth of the working poor creates two major inaccuracies in the poverty measure. b) even after taxes, income is further reduced by work-related expenses, primarily childcare. c) both liberals and conservatives agree that something should be done to base the poverty line on actual disposable income rather than gross income. d) All of the above

d) All of the above

Some conservatives believe that rich people are entitled to hundreds of times the income of regular people because: a) They take great risks, often losing everything, so when their risks pay off, they should be rewarded. b) Rich people create more wealth for all of us. c) Rich people do not consume their wealth. d) All of the above.

d) All of the above.

1. Which of these statements is NOT true? a) Trends in the distribution of wealth and income have shown that the wealthy and the poor are maintaining stagnant levels of financial growth. b) Trends in the distribution of wealth and income have shown that the wealthy are getting substantially wealthier. c) Trends in the distribution of wealth and income have shown that the poor are getting substantially wealthier. d) None of the above

c) Trends in the distribution of wealth and income have shown that the poor are getting substantially wealthier.

In the United States, the relative poverty line is set: a) by annual surveys. b) through calculation of necessities. c) as a percentage of median income. d) All of the above.

c) as a percentage of median income.

When exploring if the poverty line is set at a realistic level, a) conservatives argue that the poverty line is set at too low level, noting that they believe total needs from spending on food is incorrect. b) liberals argue that the poverty line is set at too high a level, noting that the USDA itself estimates that only 10% of the persons spending the amount allowed in the economy food budget are able to get a nutritionally adequate diet. c) progressives argue that the poverty line needs to be dismantle, no baseline should be set for defining poverty d) None of the above

d) None of the above

The General Social Survey found that: a) respondents set a relative poverty line that was much higher than the official level. b) respondents thought single mothers needed more money. c) respondents thought two parent families needed the same amount per capital as single mothers. d) none of the above.

d) none of the above.