chapter 8: inequality

what relationship exists between income and well-being?

a positive relationship with decreasing marginal gains in well-being as income rises

the official poverty line depends on _____ and is adjusted every year to reflect changes in the cots of living

the size and composition of a family

social insurance programs do NOT;

use a means test to qualify people for benefits

you hope you find a job, which enables you to earn a high income, but you recognize that others making less may have a higher living standard because they have more:

wealth

which gift is most like an income transfer rather than an in-kind transfer?

a giftcard branded through one of the main credit card companies

Much of the rise in income inequality in the recent years in the United States comes from:

a rising gap between the incomes of highly educated and less educated workers

many government programs associated with the welfare state are believed to cause deadweight loss, since they:

affect incentives to work and to save

focusing on differences in the amount people actually spend on goods and services as a measure of their material well-being rather than comparing their current incomes leads to a focus on ____ in discussion of the level of economic inequality across households.

consumption

Medicaid is funded by

federal and state governments

which statement described a poverty line based on absolute poverty?

income is below $5 per day per person in the household

social security is an ____ that is ____

monetary transfer; not means tested

myrda works as an audio technician on broadway and frequently experiences shirt-term unemployment. when she is working, she saves a good portion of her income, upon which she relies she is unemployed. myrdas approach is consistent with the:

permanent income hypothesis

which is NOT a rationale for the creation of the social safety net?

providing universal health care

the tech startup where you worked went out of business. you were worried about depleting your wealth entirely but avoided that outcome thanks to:

social insurance

during the midst of covid, your uncle was part of a group of employees that his company laid off. his families household income declined, and they struggle to provide for his 2 children. which would not have been a US government program potentially available to him?

social security

which income redistribution would increase total well-being the most?

someone in the 95th percentile to someone in the 10th percentile

permanent income is a person's:

average income over their lifetime

actual poverty is less then the official poverty rate primarily because:

tax credits and non-cash benefits are not included when calculating incomes.