chapter 20 - Chapter 20 Income Inequality and Poverty...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 20 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. ANS: F DIF: 1 REF: 20-1 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. ANS: T DIF: 1 REF: 20-1 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Income inequality MSC: Definitional 3. The United States has more income inequality than Brazil and South Africa. ANS: F DIF: 1 REF: 20-1 NAT: Analytic LOC: The study of economics, and definitions of economics TOP: Income inequality MSC: Definitional 4. Standard measurements of the degree of income inequality take both money income and in-kind transfers into account. ANS: F DIF: 2 REF: 20-1 NAT: Analytic LOC: The study of economics, and definitions of economics 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. ANS: F DIF: 2 REF: 20-2 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. ANS: T DIF: 2 REF: 20-3 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. ANS: F DIF: 2 REF: 20-3 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. ANS: T DIF: 1 REF: 20-0 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. ANS: T DIF: 1 REF: 20-0 NAT: Analytic LOC: The role of government TOP: Income inequality MSC: Applicative 67 68 Chapter 20/Income Inequality and Poverty 10. In the United States in 2005, the bottom fifth of the income distribution had incomes below $19,250. ANS: F DIF: 1 REF: 20-1 NAT: Analytic LOC: Efficiency and equity TOP: Income inequality MSC: Applicative 11. The top 5 percent of U.S. annual family income in 2005 was $184,500 or more. ANS: T DIF: 1 REF: 20-1 NAT: Analytic LOC: Efficiency and equity TOP: Income inequality MSC: Applicative 12. A U.S. family earning $80,000 would be in the top 20 percent of income distribution in 2005....
View Full Document

Page1 / 57

chapter 20 - Chapter 20 Income Inequality and Poverty...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online