Chapter 20(sample exercise)

Chapter 20(sample exercise) - Chapter 20Income Inequality...

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Chapter 20—Income Inequality and Poverty 1. All of the following are problems with measuring inequality, EXCEPT that a. the measurements usually do not include in-kind transfers. b. the measurements use lifetime incomes rather than annual incomes. c. the measurements should use permanent income, not including transitory changes. d. poverty is long term for relatively few families. 2. The income distribution in a society is largely a. determined by the government's policies. b. determined by business decisions. c. determined by factors that determine wages. d. independent of market allocations of resources. 3. In general, the invisible hand of the marketplace acts to allocate resources a. neither efficiently nor fairly. b. fairly, but not necessarily efficiently. c. efficiently and fairly. d. efficiently, but not necessarily fairly. 4. All of the following are questions that need to be answered by a measurement of the distribution of income, EXCEPT: a. How much inequality is there in our society? b. How many people live in poverty? c. How often do people receive raises? d. What problems arise in measuring the amount of inequality? 5. If income were equally distributed among households, a. the household's relative share of income would increase. b. the household's relative share of income would decline. c. 50 percent of the households would receive exactly 50 percent of the income. d. all households would become rich. 6. Based on Canadian income data from 2001, the top fifth of all families received approximately how many times as much income as the bottom fifth? a. 9 b. 5 c. 3 d. 2 7. Canadian income data over the last sixty 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, and then reversed itself. d. gradually became more equal until about 1970, and then reversed itself. 8. Evidence suggests that the women's movement has a. decreased income inequality across households. b. increased income inequality across households. c. had no effect on the distribution of income across households. d. decreased the importance of traditional measures of income inequality.
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9. In Canada, the poverty rate is a measure of the percentage of people whose income falls below a. an identified income standard. b. the median family of four income. c. the amount of expenditures for a family. d. an average level of income. 10. Measuring poverty using an absolute income scale (like the poverty line) is likely to be deceptive because a. income measures don't include the value of in-kind transfers.
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This note was uploaded on 01/07/2010 for the course ECO eco1104 taught by Professor Davidgray during the Fall '09 term at University of Ottawa.

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Chapter 20(sample exercise) - Chapter 20Income Inequality...

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