Ch020TestBank - CHAPTER 32 Income Inequality and Poverty...

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CHAPTER 32 Income Inequality and Poverty Topic Question numbers ___________________________________________________________________________________________________ 1. Income inequality; Lorenz Curve 1-27 2. Income mobility; government redistribution 28-42 3. Causes of income inequality 43-54 4. Trends in income inequality 55-62 5. Arguments for and against inequality 63-68 6. Equality versus efficiency tradeoff 69-72 7. Poverty 73-84 8. Income maintenance system 85-114 9. Welfare reform and TANF 115-124 Consider This 125-126 Last Word 127-129 True-False 130-144 ___________________________________________________________________________________________________ Multiple Choice Questions Income inequality; Lorenz Curve Econ: 616 LO: 32-2 Micro: 382 Status: New Topic: 1 Type: Fact 1. In 2004 the average income for households in the United States was about: A) $60,500. B) $22,800. C) $9,600. D) $82,700. Ans: A Econ: 616 LO: 32-1 Micro: 382 Topic: 1 Type: Fact 2. In the quintile distribution of income, the term "quintile" represents: A) 5 percent of the income receivers. C) 20 percent of the income receivers. B) 10 percent of the income receivers. D) 25 percent of the income receivers. Ans: C Econ: 616 LO: 32-2 Micro: 382 Status: New Topic: 1 Type: Fact 3. In 2004 a household with an annual income of $100,000 would find itself in the: A) second lowest quintile of the household income distribution. B) third quintile of the household income distribution. C) fourth quintile of the household income distribution. D) fifth (highest) quintile of the household income distribution. Ans: D
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Econ: 616 LO: 32-1 Micro: 382 Status: New Topic: 1 Type: Fact 4. In 2004 a household with an annual income of $20,000 would find itself in the: A) highest quintile of the household income distribution. B) lowest quintile of the household income distribution. C) second lowest quintile of the household income distribution. D) second highest quintile of the household income distribution. Ans: C Econ: 616 LO: 32-2 Micro: 382 Status: New Topic: 1 Type: Fact 5. The lowest quintile of households in the income distribution receives about: A) 2.2 percent of the total income. C) 8.4 percent of the total income. B) 3.5 percent of the total income. D) 10 percent of the total income. Ans: B Econ: 616 LO: 32-1 Micro: 382 Topic: 1 Type: Application of Concept 6. If the top quintile (fifth) of all households receives 48 percent of total income and the lowest quintile receives 4 percent of total income, we can conclude that: A) the resulting Lorenz curve will be a 45-degree straight line. B) the top quintile receives twelve times as much income as the lowest quintile. C)
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This note was uploaded on 03/03/2010 for the course ECON E103 taught by Professor Johnson during the Spring '08 term at Indiana University South Bend.

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Ch020TestBank - CHAPTER 32 Income Inequality and Poverty...

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