Question 1

The recession that began with a housing market crash in 2007 had the effect of reducing income inequality.

Accepted Answer

A) True 
 B)False

Question 2

What is the distributive effect of the Social Security tax? Explain.

Accepted Answer

All individuals pay the same Social Secu

Question 3

Real income will fall whenever:

Accepted Answer

A) prices and wages increase at the same rate. 
B) wages increase faster than prices. 
C) prices increase faster than wages. 
D) wages increase and prices stay the same. 
A) prices and wages increase at the same rate. 
B) wages increase faster than prices. 
C) prices increase faster than wages. 
D) wages increase and prices stay the same.

Question 4

Refer to the graph shown.   The poorest 25 percent of the families earn:

Accepted Answer

A) 6 percent of the income. 
B) 19 percent of the income. 
C) 36 percent of the income. 
D) 64 percent of the income. 
A) 6 percent of the income. 
B) 19 percent of the income. 
C) 36 percent of the income. 
D) 64 percent of the income.

Question 5

Refer to the graph shown.   The fourth quintile (a quintile is a fifth)of the families earn:

Accepted Answer

A) 52 percent of the income. 
B) 28 percent of the income. 
C) 24 percent of the income. 
D) 20 percent of the income. 
A) 52 percent of the income. 
B) 28 percent of the income. 
C) 24 percent of the income. 
D) 20 percent of the income.

Question 6

All of the following are examples of socioeconomic distribution of income except how much:

Accepted Answer

A) the top 10 percent of a population gets. 
B) Black people get relative to white people. 
C) two-parent households get relative to single-parent households. 
D) the young get relative to the old. 
A) the top 10 percent of a population gets. 
B) Black people get relative to white people. 
C) two-parent households get relative to single-parent households. 
D) the young get relative to the old.

Question 7

Economic theory tells us that inequality in income is unfair if differences in opportunity leads to inequality of income.

Accepted Answer

A) True 
 B)False

Question 8

Refer to the graph shown.   The country with the most unequal distribution of income is:

Accepted Answer

A) Sweden. 
B) Taiwan. 
C) the United States. 
D) Brazil. 
A) Sweden. 
B) Taiwan. 
C) the United States. 
D) Brazil.

Question 9

Which of the three types of tax systems (progressive,proportional,regressive)redistributes income? Explain.

Accepted Answer

Both progressive and regressive tax syst

Question 10

In the United States, the income distribution is shaped like a:

Accepted Answer

A) pyramid. 
B) diamond. 
C) square. 
D) pentagon. 
A) pyramid. 
B) diamond. 
C) square. 
D) pentagon.

Question 11

Share distribution of income is the relative division of total income among:

Accepted Answer

A) capitalists, workers, and landowners. 
B) income groupings. 
C) socioeconomic groupings. 
D) nationality groupings. 
A) capitalists, workers, and landowners. 
B) income groupings. 
C) socioeconomic groupings. 
D) nationality groupings.

Question 12

In the United States:

Accepted Answer

A) the upper class has become the largest class. 
B) the lower class has become the largest class. 
C) the middle class has become the largest class. 
D) all three classes are the same size. 
A) the upper class has become the largest class. 
B) the lower class has become the largest class. 
C) the middle class has become the largest class. 
D) all three classes are the same size.

Question 13

What is the official definition of poverty in the U.S.?

Accepted Answer

A family is in poverty if it h

Question 14

"To eliminate poverty,all we need to do is tax the millionaires and billionaires sufficiently,and spread the money around among the poor based on who needs it the most." Do you agree or disagree with this statement? Why?

Accepted Answer

There is no single correct answer to thi

Question 15

The democratic system of one person/one vote:

Accepted Answer

A) necessarily leads to a political system that favors the poor because there are more poor voters than there are rich voters. 
B) necessarily leads to a political system that favors the poor because the poor organize themselves into groups that can deliver votes to politicians. 
C) does not necessarily lead to a political system that favors the poor, because many of the poor do not vote, believing that their individual votes cannot make a difference. 
D) does not necessarily lead to a political system that favors the poor because many of the poor are illiterate and unable to vote. 
A) necessarily leads to a political system that favors the poor because there are more poor voters than there are rich voters. 
B) necessarily leads to a political system that favors the poor because the poor organize themselves into groups that can deliver votes to politicians. 
C) does not necessarily lead to a political system that favors the poor, because many of the poor do not vote, believing that their individual votes cannot make a difference. 
D) does not necessarily lead to a political system that favors the poor because many of the poor are illiterate and unable to vote.

Question 16

The official poverty income threshold in the United States is:

Accepted Answer

A) adjusted for changes in the basket of food purchased by the average family. 
B) not adjusted for the effects of inflation. 
C) adjusted for inflation. 
D) adjusted for increases in standard of living. 
A) adjusted for changes in the basket of food purchased by the average family. 
B) not adjusted for the effects of inflation. 
C) adjusted for inflation. 
D) adjusted for increases in standard of living.

Question 17

One of the major complaints about state lotteries is that they are played primarily by the poor. Hence, because lotteries do not pay out in prizes as much as they take in as revenue, this way of raising state revenue is:

Accepted Answer

A) progressive. 
B) retroactive. 
C) reactionary. 
D) regressive. 
A) progressive. 
B) retroactive. 
C) reactionary. 
D) regressive.

Question 18

Which of the following is not one of the side effects economists have found in programs to redistribute income?

Accepted Answer

A) The incentive effects of a tax may result in a switch from labor to leisure. 
B) The effects of taxes may include attempts to avoid or evade taxes, leading to a decrease in measured income. 
C) The incentive effects of distributing money may cause people to make themselves look needier than they really are. 
D) The incentive effects of distributing money may cause people to avoid government assistance programs. 
A) The incentive effects of a tax may result in a switch from labor to leisure. 
B) The effects of taxes may include attempts to avoid or evade taxes, leading to a decrease in measured income. 
C) The incentive effects of distributing money may cause people to make themselves look needier than they really are. 
D) The incentive effects of distributing money may cause people to avoid government assistance programs.

Question 19

Today, the Gini coefficient of income inequality for the United States is about .5. In 1975, it had been about .4. What do these numbers tell us?

Accepted Answer

A) Wealth is distributed less equally than income. 
B) The number of rich people has fallen. 
C) Income has become more unequally distributed. 
D) The official definition of poverty has changed. 
A) Wealth is distributed less equally than income. 
B) The number of rich people has fallen. 
C) Income has become more unequally distributed. 
D) The official definition of poverty has changed.

Question 20

According to the text, the most important income distribution decisions that the government makes involve:

Accepted Answer

A) establishing and protecting property rights. 
B) maintaining a progressive income tax structure. 
C) redistributing income through transfer payments to the poor. 
D) encouraging innovation through direct subsidies. 
A) establishing and protecting property rights. 
B) maintaining a progressive income tax structure. 
C) redistributing income through transfer payments to the poor. 
D) encouraging innovation through direct subsidies.

Exam 18: Who Gets What the Distribution of Income

The recession that began with a housing market crash in 2007 had the effect of reducing income inequality.

What is the distributive effect of the Social Security tax? Explain.

Real income will fall whenever:

Refer to the graph shown. The poorest 25 percent of the families earn:

Refer to the graph shown. The fourth quintile (a quintile is a fifth)of the families earn:

All of the following are examples of socioeconomic distribution of income except how much:

Economic theory tells us that inequality in income is unfair if differences in opportunity leads to inequality of income.

Refer to the graph shown. The country with the most unequal distribution of income is:

Which of the three types of tax systems (progressive,proportional,regressive)redistributes income? Explain.

In the United States, the income distribution is shaped like a:

Share distribution of income is the relative division of total income among:

In the United States:

What is the official definition of poverty in the U.S.?

"To eliminate poverty,all we need to do is tax the millionaires and billionaires sufficiently,and spread the money around among the poor based on who needs it the most." Do you agree or disagree with this statement? Why?

The democratic system of one person/one vote:

The official poverty income threshold in the United States is:

One of the major complaints about state lotteries is that they are played primarily by the poor. Hence, because lotteries do not pay out in prizes as much as they take in as revenue, this way of raising state revenue is:

Which of the following is not one of the side effects economists have found in programs to redistribute income?

Today, the Gini coefficient of income inequality for the United States is about .5. In 1975, it had been about .4. What do these numbers tell us?

According to the text, the most important income distribution decisions that the government makes involve:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

Filters