Exam 18: The Distribution of Income

The official poverty rate in the United States _____ since 1970.

_____ is a government social insurance program.

(Figure: Lorenz Curve 0) In the figure, income equality increases if area _____ gets _____.

If the marginal tax rate is _____, then the incentive to work harder is:

Bart, a low-income worker, is asked by his supervisor to work extra hours and earn an extra $125 a week. His taxes will increase by $30, and his government benefits will be reduced by $40. What is Bart's implicit marginal tax rate?

_____ occurs when all households receive equal income in a society.

To understand the tradeoffs between equity and efficiency in evaluating antipoverty programs, _____ is often used.

_____ is a factor in the widening income inequality gap due in part to the increase in demand for highly skilled workers worldwide.

In 2015, extreme poverty rates had fallen worldwide to about _____%, a decrease from _____% in 1970.

_____ is a factor in the widening income inequality gap due in part to the likelihood that high-income people are more likely to marry and to marry others with high levels of education.

_____ is the amount of additional taxes that are paid and benefits that are forgone from an additional dollar in income.

Most economists agree that a free market system can lead to considerable income inequality, and yet there appears to be widespread support for some redistribution of income. Discuss two key issues to consider in designing an antipoverty program.

The earned income tax credit increases the incentive to work because workers are able to:

The effect of the earned income tax credit on the workers is to:

The _____ is a summary measurement of relative income or wealth inequality. It is perhaps the most widely used measure of income inequality.

A _____ is a statistical unit that represents one fifth (20%) of a given population.

When implicit marginal tax rates are excessively _____, the incentive to work additional hours is:

(Figure: Lorenz Curve) In the figure, the Lorenz curve representing perfect income equality is:

The earned income tax credit is designed to:

(Figure: Lorenz Curve 0) In the figure, the Gini coefficient is calculated by: