Ngân hàng đề thi câu hỏi trắc nghiệm kinh tế vi mô chương 20 (principle of economics mankiw 2018)

Toàn bộ những gì bạn cần để qua môn kinh tế học, tài liệu này tập hợp những câu hỏi trắc nghiệm mới nhất của kinh tế vi mô năm 2018. Về nội dung tài liệu, với các khái niệm phổ biến và khái quát nhất về kinh tế vi mô cũng như những giải thích về các cơ chế hoạt động của nền kinh tế, bộ giáo trình bao gồm 23 phần cung cấp cho người đọc các kiến thức khá toàn diện và chuyên sâu về các nguyên lý kinh tế học như các lý thuyết cổ điển, các lý thuyết về phát triển: nền kinh tế trong dài hạn, các lý thuyết về vòng tròn kinh tế: nền kinh tế trong ngắn hạn, các yếu tố vi mô ẩn sau kinh tế vĩ mô, các tranh luận về chính sách vĩ mô… Tất cả đều được giải thích và đánh giá bởi một vị giáo sư kinh tế hàng đầu trên thế giới. Các khái niệm trong sách được định nghĩa rất rõ ràng, dễ nắm bắt, dễ hiểu, có tóm tắt các chương tạo điều kiện tốt nhất cho việc ôn tập

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Income Inequality and Poverty

TRUE/FALSE

1 The poverty line is set by the government so that 10 percent of all families fall below that line and are thereby classified as “poor.”

NAT: Analytic LOC: The study of economics, and definitions of economics

TOP: Poverty line MSC: Definitional

2 The United States has more income inequality than Japan, Germany, and Canada

3 The United States has more income inequality than Brazil and South Africa

4 Standard measurements of the degree of income inequality take both money income and in-kind transfers into account

TOP: In-kind transfers | Income inequality MSC: Definitional

5 John Rawls, who developed the way of thinking called liberalism, argued that government policies should be

aimed at maximizing the sum of utility of everyone in society

NAT: Analytic LOC: The role of government TOP: Utility

MSC: Interpretive

6 One existing government program that works much like a negative income tax is the Earned Income Tax Credit

NAT: Analytic LOC: The role of government TOP: Negative income tax

MSC: Interpretive

7 One existing government program that works much like a negative income tax is Medicaid

NAT: Analytic LOC: The role of government TOP: Negative income tax

MSC: Interpretive

8 The invisible hand of the marketplace acts to allocate resources efficiently, but it does not necessarily ensure that resources are allocated fairly

NAT: Analytic LOC: Efficiency and equity TOP: Income inequality

MSC: Applicative

9 When the government enacts policies to make the distribution of income more equitable, it distorts incentives, alters behavior, and makes the allocation of resources less efficient

NAT: Analytic LOC: The role of government TOP: Income inequality

MSC: Applicative

10 In the United States in 2005, the bottom fifth of the income distribution had incomes below $19,250

MSC: Applicative

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11 The top 5 percent of U.S annual family income in 2005 was $184,500 or more.

MSC: Applicative

12 A U.S family earning $80,000 would be in the top 20 percent of income distribution in 2005

MSC: Applicative

13 Free trade and economic growth have reduced poverty worldwide

MSC: Applicative

14 Although globalization has reduced income inequality, the number of people living in extreme poverty has remained unchanged

MSC: Interpretive

15 The measured poverty rate may not reflect the true extent of economic deprivation because it does not include some forms of government assistance

MSC: Applicative

16 The poverty line is an absolute standard and is based on the cost of providing an adequate diet

MSC: Definitional

17 The poverty line is based on the percentage of people who cannot afford an adequate diet

MSC: Interpretive

18 The poverty rate is a measure of people unable to meet the government’s poverty line

MSC: Interpretive

19 The elderly represent the largest demographic group in poverty

MSC: Applicative

20 About half of black and Hispanic children in female-headed households live in poverty

MSC: Applicative

21 The economic life cycle describes how young people usually have higher savings rates than middle-aged people

NAT: Analytic LOC: Efficiency and equity TOP: Economic life cycle

MSC: Applicative

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22 Many economists believe that a family bases its spending decisions on its permanent, or average, income rather than on transitory income.

NAT: Analytic LOC: Efficiency and equity TOP: Economic life cycle

MSC: Applicative

23 About four out of five millionaires in the United States earned their money rather than inherited it

MSC: Applicative

24 Fewer than three percent of families are poor for eight or more years

MSC: Applicative

25 Utilitarians believe that the proper goal of the government is to maximize the sum of the utilities of everyone

in society

NAT: Analytic LOC: The role of government TOP: Utilitarianism

MSC: Interpretive

26 The utilitarian justification for redistributing income is based on the assumption of diminishing marginal

utility.

NAT: Analytic LOC: The role of government TOP: Utilitarianism

MSC: Interpretive

27 If a government could successfully achieve the maximin criterion, each member of society would have an equal income

NAT: Analytic LOC: The role of government TOP: Liberalism

MSC: Interpretive

28 According to libertarians, the government should redistribute income from rich individuals to poor individuals

to achieve a more equal distribution of income

NAT: Analytic LOC: The role of government TOP: Libertarianism

MSC: Interpretive

29 Libertarians believe that the government should enforce individual rights to ensure that all people have the same opportunities to use their talents to achieve success

NAT: Analytic LOC: The role of government TOP: Libertarianism

MSC: Interpretive

30 The poverty rate is an absolute level of income set by the federal government for each family size below which a family is deemed to be in poverty

NAT: Analytic LOC: Efficiency and equity TOP: Poverty rate, Poverty line

MSC: Definitional

31 An income distribution may not give an accurate picture of families’ standards of living because it does not include in-kind transfers

MSC: Interpretive

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32 A goal of libertarians is to provide citizens with equal opportunities rather than to ensure equal outcomes.

MSC: Interpretive

33 Temporary Assistance for Needy Families (TANF) is an example of a negative income tax program

MSC: Applicative

34 When poor families in developing countries experience an increase in family income, their children supply fewer hours of labor

MSC: Applicative

35 Education is the most important factor explaining reductions in child labor in Vietnam

MSC: Applicative

36 Internet access is the most important factor explaining reductions in child labor in Vietnam

MSC: Applicative

37 Since 1959 the United States’ income distribution has become more equal

MSC: Applicative

38 In 2005 the top fifth of income earners accounted for over 50% of all income received by United States’ families

MSC: Applicative

39 In 2005 the top 5 percent of income earners accounted for over 50% of all income received by United States’ families

MSC: Applicative

40 From 1935 to 2005 the share of total income earned by the bottom fifth of income earners rose and then fell

MSC: Interpretive

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2 What is meant by a perfectly equal distribution of income? Use a graph to depict such a situation.

ANS:

If income were equally distributed across all families, each one-fifth of families would receive one-fifth of income That is, 20 percent of all families would receive 20 percent of all income, 60 percent of all families would receive 60percent of all income, etc

MSC: Analytical

3 Given the table shown, which country has a more equal income distribution? Explain your answer

Country Bottom Fifth Second Fifth Middle Fifth Fourth Fifth Top Fifth

MSC: Analytical

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5 Compare and contrast the "life cycle" hypothesis and the "permanent income" hypothesis What are their respective implications for inequality in the income distribution?

The permanent income hypothesis tries to account for random and transitory forces that affect income People may borrow when they experience a temporary reduction in income and may save unexpected increases in income (e.g a holiday bonus from an employer) The two theories are not mutually exclusive

Both theories would indicate that standard measures of income distribution overstate inequality in the distribution ofwell-being

MSC: Interpretive

6 Explain the concept of diminishing marginal utility, and describe the role that it plays in the utilitarian argument for the redistribution of income

ANS:

Diminishing marginal utility refers to the principle that as a person's income rises, the extra well-being derived from

an additional dollar of income falls The utilitarian argument of redistribution from rich to poor hinges on the fact that a dollar of additional income to the poor is valued more than a dollar of additional income to the rich If this is not true, then the transfer from rich to poor would actually reduce the well-being of society

TOP: Diminishing marginal utility | Utilitarianism MSC: Interpretive

7 Explain how a "leaky bucket" can be used to illustrate the utilitarian argument that governments should not attempt to completely equalize individual incomes

ANS:

Utilitarians reject complete equalization of income because they believe that people respond to incentives As such, redistribution will reduce some people’s work efforts, which can actually lead to less total income generated in the economy If the government attempts to redistribute income from the rich to the poor through taxes, some of the money will be lost due to the distorted incentives and deadweight losses associated with the taxes We can think of the government as transporting the redistributed income in a “leaky bucket.”

developed the liberalism philosophy in his book A Theory of Justice.

According to libertarianism, the government should punish crimes and enforce voluntary agreements but not redistribute income that was fairly earned (not stolen) Libertarians argue that society itself earns no income; only individual members of society earn income Robert Nozick was a libertarian

MSC: Analytical

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9 The table below reflects the levels of total utility received from income for each of four members of a society.

b Assume that the government has $19 to allocate among the four members of society (Assume that

no one has any income to start with.) If the government is interested in distributing income in a

way that maximizes aggregate total utility, how should it distribute the $19 of income?

c Does the table above describe a situation characterized by diminishing marginal utility? Explain

your answer

ANS:

a No If a dollar is taken from anyone, the possible net gain in utility to any other person is less

than or equal to the loss incurred by the person it is taken from

b Peter $4

Paul $7

Mary $5

Jane $3

c Yes Marginal utility declines as income increases for each person

MSC: Analytical

10 Assume that the government proposes a negative income tax that calculates taxes owed by the following formula,

Taxes Owed = (1/3 Income) - $10,000

Compute the tax that would be owed given each level of income

e No taxes will be owed Instead, the family/person would receive a subsidy of $10,000

MSC: Analytical

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11 Assume that the government proposes a negative income tax that calculates taxes owed by the formula, Taxes Owed = (a Income) - b A family with an income of $40,000 pays $5,000 in taxes, and a family with an income of $12,000 receives an income subsidy of $2,000.

a What is the value for “a”?

b What is the value for “b”?

c What is the tax liability of a family with an income of $50,000?

d At what level of income will a family neither pay taxes, nor receive an income subsidy?

restrictive, society is somewhat reassured that recipients are not spending their benefits on unproductive addictions such as alcohol Advocates of cash payments argue that in-kind transfers are inefficient because the government does not know what goods and services the poor need most

MSC: Applicative

14 Outline the possible work disincentives created by anti-poverty programs Is there a way to solve this problem without causing other forms of inefficiency to arise? Explain your answer

ANS:

A high marginal tax rate exists on welfare transfers There is inherently a trade-off between burdening the poor with

a high effective marginal tax rate and burdening taxpayers with costly programs to reduce poverty

MSC: Analytical

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Sec 00 Income Inequality and Poverty

MULTIPLE CHOICE

1 A government's policy of redistributing income makes the income distribution

a more equal, distorts incentives, alters behavior, and makes the allocation of resources more

efficient

b more equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient

c less equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient

d less equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient

LOC: Efficiency and equity | The study of economics, and definitions of economics

3 Which of the following is most likely to occur when the government enacts policies to make the distribution of income more equal?

a A more efficient allocation of resources

b A distortion of incentives

c Unchanged behavior

d All of the above are correct

MSC: Applicative

4 The invisible hand of the marketplace acts to allocate resources

a efficiently but does not necessarily ensure that resources are allocated fairly

b both fairly and efficiently

c fairly but does not necessarily ensure that resources are allocated efficiently

d neither fairly nor efficiently

MSC: Applicative

5 The marketplace allocates resources

a fairly

b efficiently

c to those desiring them least

d both efficiently and equitably

MSC: Applicative

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6 When the government redistributes income to achieve greater equality, it

a distorts incentives

b improves efficiency

c focuses on middle income brackets

d relies on foreign aid to help balance the budget

MSC: Interpretive

7 Government programs that take money from high-income people and give it to low-income people typically

a improve economic efficiency by reducing poverty

b reduce economic efficiency because they distort incentives

c have no effect on economic efficiency because they both reduce poverty and distort incentives

d sometimes improve, sometimes reduce, and sometimes have no effect on economic efficiency

MSC: Interpretive

8 In the U.S economy, labor earnings make up about

a one-half of total income

b two-thirds of total income

c three-fourths of total income

d nine-tenths of total income

9 When the government enacts policies to redistribute income,

a the objective is to enhance efficiency and a side effect is that the allocation of resources becomes more equal

b the objective is to enhance efficiency and a side effect is that the allocation of resources becomes less equal

c the objective is to enhance equality and a side effect is that the allocation of resources becomes

more efficient

d the objective is to enhance equality and a side effect is that the allocation of resources becomes less efficient

NAT: Analytic LOC: Efficiency and equity TOP: Efficiency | Equity

MSC: Interpretive

10 Which of the following is correct?

a Governments can never improve market outcomes

b Governments can sometimes improve market outcomes

c Governments can always improve market outcomes

d Government can never make the income distribution more equal

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11 Which of the Ten Principles of Economics do governments run into when they redistribute income

to achieve greater equality?

a Trade can make everyone better off

b The cost of something is what you give up to get it

c People face trade-offs

d Markets are usually a good way to organize economic activity

TOP: Ten principles of economics MSC: Definitional

12 Which of the Ten Principles of Economics come into conflict with each other in this chapter?

a A country’s standard of living depends on its ability to produce goods & People face tradeoffs

b Prices rise when the government prints too much money & Governments can sometimes improve

market outcomes

c Governments can sometimes improve market outcomes & People face tradeoffs

d People face tradeoffs & Prices rise when the government prints too much money

TOP: Ten principles of economics MSC: Definitional

Sec 01 Income Inequality and Poverty

The Measurement of Inequality

MULTIPLE CHOICE

1 Governments enact policies to

a make the distribution of income more efficient

b make the distribution of income more equal

c maximize the use of the welfare system

d minimize the use of in-kind transfers

MSC: Interpretive

2 A family’s ability to buy goods and services depends largely on its

a permanent income, which is its normal, or average, income

b permanent income, which is the lowest annual income the family has received over a 10-year

period

c transitory income, which is the measure of income used by the government to analyze the

distribution of income and the poverty rate

d transitory income, which is its money income plus any in-kind transfers it receives

TOP: Consumption | Income MSC: Interpretive

3 Which of the following is not a question that economists try to answer when measuring the

distribution of income?

a How many people live in poverty?

b How often and how large are people’s raises?

c How often do people move among income classes?

d What problems arise in measuring the amount of inequality?

MSC: Applicative

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4 Economists study poverty and income inequality in order to answer which of the following

questions?

a What are people's wages?

b How does labor-force experience affect wages?

c How much inequality is there in society?

d How do people adjust their behavior due to taxation?

MSC: Applicative

5 Comparing the United States household income distribution to other countries is

a easy, because data is available for all countries in the world

b easy, because some countries collect data on expenditures instead of incomes

c problematic, because international agreements require countries to standardize their income

accounting procedures

d problematic, because countries collect data in different ways

c more than 10 times the income of the bottom fifth

d not much different from the income of the top 5 percent

MSC: Applicative

9 Based on U.S income data from 2005, the top fifth of all families received

a the same share of income as the bottom fifth

b twice as much income as the bottom fifth

c approximately 5 times more income than the bottom fifth

d more than 10 times more income than the bottom fifth

MSC: Applicative

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10 U.S income data over the last seventy years suggests that the distribution of income

a has gradually become more equal over the entire time period

b has gradually become less equal over the entire time period

c gradually became less equal until about 1970, then became more equal from 1970 to 2005

d gradually became more equal until about 1970, then became less equal from 1970 to 2005

MSC: Applicative

13 Which of the following is not correct?

a Poverty is long-term problem for relatively few families

b Measurements of income inequality usually do not include in-kind transfers

c Measurements of income inequality use lifetime incomes rather than annual incomes

d Measurements of income inequality would be more meaningful if they reflected permanent rather

than current income

MSC: Applicative

14 Which of the following represents a problem in measuring inequality?

a Measurements of income distributions typically include in-kind transfers, which distort the measure

of inequality

b A normal life-cycle pattern causes inequality in the income distribution but may not reflect

inequality in living standards

c Transitory income is a better measure of inequality than permanent income

d Both a and b are correct

MSC: Interpretive

15 If income were equally distributed among households,

a each household's relative share of income would increase

b each household's relative share of income would decrease

c the top fifth of households would have 50 percent of the income

d 50 percent of the households would receive exactly 50 percent of the income

MSC: Interpretive

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16 Which of the following does not explain the rise in income inequality from 1970 to 2005?

a Changes in technology

b An increase in minimum wages

c A reduction in the demand for unskilled labor

d Increased international trade with low-wage countries

MSC: Interpretive

17 Which of the following explains the rise in income inequality from 1970 to 2005?

a An increase in minimum wages

b An increase in the demand for skilled labor

c An increase in the demand for unskilled labor

d Reduced international trade with low-wage countries

MSC: Interpretive

Table 20-1

Top Quartile (25%) $85,000 and over

Second Quartile $50,000 to $84,999

18 Refer to Table 20-1 Seventy-five percent of all families have incomes below what level?

a $28,000

b $50,000

c $85,000

d There is insufficient information to answer this question

MSC: Interpretive

20 When we compare the income distribution of the United States to those of other countries, we find that the U.S

a has one of the most unequal income distributions

b has one of the most equal income distributions

c ranks in the middle of the group

d is second to China as the most unequal distribution

MSC: Interpretive

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c more equal at the lowest level of income but less equal at highest level of income.

d less equal at the lowest level of income but more equal at highest level of income

MSC: Applicative

Table 20-3

The Distribution of Income in Hapland

Group Annual Family Income

Top Fifth $120,000 and over

Fourth Fifth $90,000 - 119,999

Middle Fifth $60,000 - 89,999

Second Fifth $45,000 - 59,999

Bottom Fifth Under $45,000

22 Refer to Table 20-3 According to the table, what percent of families in Hapland have income

MSC: Applicative

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24 Refer to Table 20-3 Where would the government in Hapland set the poverty line to have a

poverty rate of 40 percent?

a $45,000

b $60,000

c $90,000

d $120,000

d the United States

MSC: Interpretive

29 On average, the distribution of income tends to be

a random across richer and poorer countries

b similar between richer and poorer countries

c less equal in richer countries than in poorer countries

d more equal in richer countries than in poorer countries

MSC: Applicative

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30 The United States has relatively greater income

a inequality than developing countries but greater equality than other developed countries

b inequality than both developing and other developed countries

c equality than developing countries but greater inequality than other developed countries

d equality than both developing and other developed countries

MSC: Interpretive

31 When we examine historical data on income inequality in the U.S., we see that the distribution of income gradually became

a more equal between 1935 and 2005

b more equal between 1935 and 1973, but that trend reversed itself between 1973 and 2005

c more unequal between 1935 and 1973, but that trend reversed itself between 1973 and 2005

d more unequal between 1935 and 2005

MSC: Interpretive

32 The 2005 U.S distribution of income shows that the top fifth of all families have

a more than ten times the income of the bottom 20 percent

b more than five times the income of the bottom 20 percent

c more than double the income of the bottom 20 percent

d the same share of income as the bottom 20 percent

MSC: Applicative

34 The study by economists Cox and Alm found that the 2006 pre-tax income of the richest fifth of U.S households is

a 5 times the pre-tax income of the poorest fifth

b 10 times the pre-tax income of the poorest fifth

c 15 times the pre-tax income of the poorest fifth

d 20 times the pre-tax income of the poorest fifth

MSC: Applicative

35 The study by economists Cox and Alm found that the 2006 after-tax income of the richest fifth of U.S households is

a equal to the after-tax income of the poorest fifth

b 7 times the after-tax income of the poorest fifth

c 14 times the after-tax income of the poorest fifth

d 21 times the after-tax income of the poorest fifth

MSC: Applicative

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36 The study by economists Cox and Alm found

a inequality in consumption is much smaller than inequality in annual income

b inequality in consumption is slightly smaller than inequality in annual income

c inequality in consumption is slightly larger than inequality in annual income

d inequality in consumption is much larger than inequality in annual income

MSC: Applicative

37 The study by economists Cox and Alm found

a the gap between rich and poor shrinks greatly if using after-tax income compared with pre-tax

MSC: Applicative

38 Economist Tyler Cowen attributes increased income inequality to

a lower income inequality among older populations than younder populations

b lower in-kind transfers made by governments

c a larger number of educated people in the U.S population

d the development of the internet

MSC: Applicative

39 Which of the following is not a reason given by economist Tyler Cowen for increased income inequality?

a Higher income inequality among older populations than younger populations

b Lower in-kind transfers made by governments

c A larger number of educated people in the U.S population

d The increasing numbers of older people in the U.S population overall

MSC: Applicative

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41 When comparing the percentage of income (or expenditure) of the lowest and highest 20 percent of the population,

a South Africa has a more equal income distribution than the United States

b South Africa has a more equal income distribution than Japan

c Japan has a more equal income distribution than the United States

d Mexico has a more equal income distribution than Canada

MSC: Applicative

42 Since about 1970 in the U.S.,

a decreases in the wages of unskilled workers, relative to skilled workers, have led to increased

inequality in family incomes

b increases in the wages of unskilled workers, relative to skilled workers, have led to increased

equality in family incomes

c inequality in family incomes has increased, despite increases in the wages of unskilled workers

relative to skilled workers

d inequality in family incomes has decreased, despite increases in the wages of skilled workers

relative to unskilled workers

MSC: Interpretive

43 The normal life cycle pattern of income

a contributes to more inequality in the distribution of annual income and to more inequality in living standards

b contributes to more inequality in the distribution of annual income, but it does not necessarily

contribute to more inequality in living standards

c contributes to less inequality in the distribution of annual income and to less inequality in living

standards

d has no effect on either the distribution of annual income or on living standards

TOP: Income inequality | Standard of living MSC: Interpretive

44 The poverty rate is based on a family’s

a income, in-kind transfers, and other government aid

b income and in-kind transfers

c in-kind transfers only

d income only

MSC: Definitional

45 The poverty rate is a measure of the percentage of people whose incomes fall below

a a relative level of income

b an absolute level of income

c the median income for a family of three

d the bottom 20 percent of the income distribution

MSC: Definitional

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46 The poverty rate is

a a measure of income inequality across families

b the percentage of the population whose family income falls below a specified level

c an absolute level of income set by the federal government for each family size

d measured by the number of in-kind transfers that a family receives

MSC: Interpretive

49 A commonly-used gauge of poverty is the

a income inequality rate

b average income rate

c poverty rate

d social inequality rate

MSC: Applicative

51 The percentage of families with incomes below the poverty line

a is defined as the 10 percent of U.S.households with the lowest incomes

b is known as the poverty rate

c is known as the unemployment rate

d rises as the general income level rises

MSC: Definitional

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52 Measures of poverty that fail to account for the value of in-kind transfers

a understate the actual poverty rate

b have little effect on the validity of reported poverty rates

c are generally more reliable measures of actual poverty rates

d overstate the actual poverty rate

NAT: Analytic LOC: Efficiency and equity

TOP: Poverty rate | In-kind transfers MSC: Interpretive

53 Since the early 1970s, average incomes have

a increased, which has reduced the poverty rate

b increased, while the poverty rate increased slightly

c decreased, while the poverty rate has remained unchanged

d remained unchanged, while the poverty rate has decreased

NAT: Analytic LOC: Efficiency and equity TOP: Poverty rate | Income

MSC: Applicative

54 In 2005, the poverty rate in the United States was 12.6 percent This means that 12.6 percent

a of the population had a total family income that fell below the poverty line

b of the population had a total family income that was above the poverty line

c of the population had a total family income below $10,000

d of the population had a total family income above $50,000

MSC: Interpretive

55 The poverty line in the country of Inequalia is $10,000 The distribution of income for Inequalia is as follows:

MSC: Analytical

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56 The distribution of income for Inequalia is as follows:

NAT: Analytic LOC: Efficiency and equity TOP: Poverty rate | Poverty lineMSC: Analytical

57 The poverty line in the country of Grim is $10,000 The distribution of income for Grim is as follows:

MSC: Analytical

58 The distribution of income for Grim is as follows:

NAT: Analytic LOC: Efficiency and equity TOP: Poverty rate | Poverty lineMSC: Analytical

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59 The distribution of income for Danville is as follows:

NAT: Analytic LOC: Efficiency and equity TOP: Poverty rate | Poverty line

MSC: Analytical

61 The distribution of income for Abbyville is as follows:

NAT: Analytic LOC: Efficiency and equity TOP: Poverty rate | Poverty line

MSC: Analytical

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62 In 2005, the poverty line for a family of four in the U.S was

a $56,194

b $28,097

c $19,971

d $12,603

MSC: Applicative

63 The poverty line is adjusted each year to reflect changes in the

a number of people currently on public assistance

b level of prices

c nutritional content of an "adequate" diet

d size of a family

MSC: Definitional

64 The federal government sets the poverty line at roughly

a five times the cost of providing an adequate diet

b four times the cost of providing an adequate diet

c three times the cost of providing an adequate diet

d two times the cost of providing an adequate diet

MSC: Definitional

65 The income level below which families are said to be poor is known as the

a income maintenance threshold

b poverty line

c bottom quintile of the income distribution

d minimum wage

MSC: Definitional

66 The poverty rate is the percentage of the population that have a family income level below the

a income maintenance threshold

b poverty line

c bottom quintile of the income distribution

d minimum wage

MSC: Applicative

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68 If the U.S government determines that the cost of feeding an urban family of four is $5,200 per year, then the official poverty line for a family of that type is

a $10,400

b $15,600

c $20,800

d $26,000

MSC: Applicative

69 The US government sets the poverty line equal to approximately

a three times the cost of providing subsidized housing

b three times the cost of providing an adequate diet

c the minimum wage for a single person working 40 hours per week and 50 weeks per year

d the cost of providing food, shelter, and health care expenses for a family of four

MSC: Applicative

70 The calculation of the poverty line includes adjustments for

a energy costs

b child care costs

c the level of prices

d the Earned Income Tax Credit

MSC: Interpretive

71 Which of the following statements is not correct?

a The poverty line is an absolute level of income set by the federal government below which a family

is considered to be in poverty

b The poverty line is approximately equal to three times the cost of providing an adequate diet

c The poverty line is adjusted annually to reflect changes in price levels

d The poverty line is adjusted semiannually to reflect changes in fuel prices

MSC: Definitional

72 Poverty is found to be correlated with

a age and race but not family composition

b race only

c race and family composition but not age

d age, race, and family composition

MSC: Applicative

73 Measuring poverty using an absolute income scale like the poverty line can be misleading because

a income measures do not include the value of in-kind transfers

b money is more highly valued by the poor than by the rich

c the poor are not likely to participate in the labor market

d income measures are not adjusted for the effects of labor-market discrimination

MSC: Interpretive

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74 Which of the following statements is correct?

a The poverty line is a relative standard

b Economic growth that raises all incomes will decrease the number of families in poverty

c Increasing income inequality reduces poverty

d Economic growth, by definition, affects all families equally

TOP: Poverty MSC: Applicative

76 Which of the following is not correct?

a Poverty is correlated with race

b Poverty is correlated with age

c Poverty is correlated with family composition

d Poverty is correlated with country of origin

MSC: Applicative

77 In comparison to the average poverty rate,

a children and the elderly are more likely to be poor

b children and the elderly are less likely to be poor

c children are more likely to be poor, but the elderly are less likely to be poor

d children are less likely to be poor, but the elderly are more likely to be poor

MSC: Applicative

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Table 20-4

Poverty Thresholds in 2002, by Size of Family and Number of Related Children Under 18 Years

[Dollars]

Related children under 18 years

more One person (unrelated individual)

Two persons

Source: U S Bureau of the Census, Current Population Survey

78 Refer to Table 20-4 What is the poverty line for a family of six with three children?

a $21,469

b $24,797

c $25,738

d $28,718

MSC: Applicative

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82 Refer to Table 20-4 What is the poverty line for a family with one 35-year-old adult and one child?

a $8,628

b $9,359

c $12,353

d $12,400

c has not changed between 1959 and 2001

d has steadily decreased between 1959 and 2001

NAT: Analytic LOC: Reading and interpreting graphs TOP: Poverty

MSC: Interpretive

84 Refer to Figure 20-1 Between 1965 and 2001, during recessions (the shaded bars) the number of

individuals in poverty has

a increased

b decrease

c not changed

d decreased and then increased

MSC: Interpretive

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85 Refer to Figure 20-1 Between 1959 and 2001 the poverty rate has

a increased

b decreased

c stayed the same

d moved in the opposite direction of the number of people in poverty

NAT: Analytic LOC: Reading and interpreting graphs TOP: Poverty rate

MSC: Interpretive

Figure 20-2

Poverty Rates by Age

86 Refer to Figure 20-2 In 2001, the percent of children under age 18 in poverty is

a higher than both the percentage of adults aged 18 to 64 and the percentage of elderly aged 65 years and over in poverty

b higher than the percentage of adults aged 18 to 64 but is lower than the percentage of elderly aged

65 years and over in poverty

c lower than both the percentage of adults aged18 to 64 and the percentage of elderly aged 65 years

and over in poverty

d lower than the percentage of adults aged 18 to 64 but is higher than the percentage of elderly aged

65 years and over in poverty

MSC: Interpretive

87 Refer to Figure 20-2 In 1968, the percent of adults aged 18 to 64 years in poverty is

a higher than both the percentage of children under age 18 and the percentage of elderly aged 65 and over in poverty

b higher than the percentage of children under age 18 but is lower than the percentage of elderly aged

65 and over in poverty

c is lower than both the percentage of children under age 18 and the percentage of elderly aged 65

and over in poverty

d is lower than the percentage of children under age 18 but is higher than the percentage of elderly

aged 65 and over in poverty

MSC: Interpretive

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