Deck 21: Poverty, Inequality, and Discrimination

Question 1

Over the last 50 years,the rich have:

A) become richer, and the poor have become poorer.
B) become richer, and the poor have become richer, too.
C) become relatively poorer, and the poor have become relatively richer.
D) become relatively poorer, and the poor have become relatively poorer, too.

Answer 1

B

Question 2

In 2011,the Census Bureau introduced an alternate poverty measure that is based on:

A) the price of food, and adjusts for geographic differences in the cost of living.
B) the prices of food, clothing, shelter, and utilities, and adjusts for geographic differences in the cost of living.
C) the price of housing, and adjusts for geographic differences in the cost of living.
D) the average income of the lowest quartile of income earners.

Answer 2

B

Question 3

The absolute poverty line looks at _____________,and the relative poverty line captures ____________

A) who cannot afford the basic necessities; what people can afford compared to those around them.
B) what people can afford compared to those around them; who cannot afford the basic necessities.
C) the percentage of the population that falls within the lowest quartile of income earners; the percentage of the population that earns 40 percent less than the median income.
D) the percentage of the population that falls within the lowest quartile of income earners; what people can afford compared to those around them.

Answer 3

A

Question 4

In the United States,the official poverty line is calculated by multiplying:

A) the average expenditure on housing for a family of a given size by 3.
B) the cost of food for a family of a given size by 3.
C) the average expenditure on housing for a family of a given size by 2.
D) the cost of food for a family of a given size by 2.

Question 5

Median income is the:

A) in the level earned by the household exactly in the middle of the national income distribution.
B) the total national income divided by the total population.
C) the total national income divided by the total number of households.
D) 50% of the top quintile level of income.

Question 6

In the United States,the official poverty line is based on:

A) the price of housing.
B) the price of clothing.
C) the price of food.
D) the average income of the lowest quartile of income earners.

Question 7

When a society is more equal:

A) the more the economy grows, so the best economy is the most equal.
B) the more everyone gains when the economy improves, but that doesn't mean the most equal society is the best society.
C) economic growth will create imbalance, and the government will need to work to equalize incomes.
D) economic growth will provide the most resources for its disadvantaged members .

Question 8

The relative poverty line defines poverty:

A) in relation to the income of the rest of the population.
B) based on the expenditure on food relative to total income.
C) as the price of basic food, clothing, shelter and utilities, and adjusts for geographic differences in the cost of living.
D) None of these is true.

Question 9

Because the U.S.poverty line is an absolute measure rather than a relative one,the official U.S.poverty rate:

A) increased steadily when there was economic growth that raised the incomes of low-income families.
B) fell steadily when there was economic growth that raised the incomes of low-income families.
C) fell steadily when there was economic growth that caused inequality to grow among the population.
D) increased steadily when there was economic growth that caused inequality to decline across the population.

Question 10

An absolute poverty line is usually set based on:

A) the cost of certain essential goods.
B) a certain percentage below the average income in a society.
C) the lowest quartile of income earners in a society.
D) the lowest 1 percent of all income earners in a society.

Question 11

The poverty rate is defined as:

A) the percentage of the population that falls below the relative poverty line.
B) the percentage of the population that falls below the absolute poverty line.
C) the percentage of low income earners to high income earners.
D) the lowest one percent of all income earners.

Question 12

Critics of the U.S.definition of poverty claim it is an inaccurate measure of our poor because:

A) it is a single number that does not capture regional differences in the cost of living.
B) the ratio of food to total income is different now than when the definition of poverty was defined.
C) it fails to account accurately for expenditures other than food.
D) All of these are true.

Question 13

Over the last 50 years,the poor have:

A) become richer at a slower rate than the rich, and so inequality has grown.
B) become richer at a slower rate than the rich, and so inequality has decreased.
C) become richer at the same rate as the rich, and so inequality has stayed the same.
D) become poorer, while the rich have become richer, and so inequality has grown.

Question 14

Over the last 50 years,poverty has been:

A) falling, and inequality has been rising.
B) falling, and inequality has been falling as well.
C) rising, and inequality has been rising as well.
D) rising, and inequality has been falling.

Question 15

In 2014,what percent of the population lived under the official poverty line in the United States?

A) 11.3 percent, down from a near all-time high of 14.8 percent in 2000.
B) 14.8 percent, higher than a near all-time low of 3.11 percent in 2000.
C) 14.8 percent, higher than a near all-time low of 11.3 percent in 2000.
D) 11.3 percent, down from a near all-time high of 25 percent in 2000.

Question 16

Since 1970,the poverty rate has largely fluctuated between:

A) 5 and 10 percent.
B) 0 and 5 percent.
C) 15 and 25 percent.
D) 10 and 15 percent.

Question 17

According to economist Emmanuel Saez,between 1993 and 2010,the incomes of the richest 1 percent grew by ________,and the other 99 percent grew by ________ on average.

A) 58 percent; 64 percent
B) 5.8 percent; 6.4 percent
C) 58 percent; 6.4 percent
D) 5.8 percent; 64 percent

Question 18

To understand how poverty,inequality,and discrimination affect the economy,__________ analysis is used,and _________ analysis is used to address whether the government should try to reduce inequality in the name of social justice.

A) positive; objective
B) subjective; normative
C) normative; positive
D) positive; normative

Question 19

Critics of the U.S.definition of poverty claim that:

A) it is set too low, because of lower food prices relative to essential goods and services
B) it is set too high, because of higher food prices relative to essential goods and services
C) it is set too low, because of lower food prices relative to essential goods and services.
D) it is set too high, because of higher food prices relative to essential goods and services.

Question 20

The US government began tracking poverty in the late:

A) 1950s.
B) 1960s.
C) 1970s.
D) 1940s.

Question 21

Those who are chronically poor are defined as those who spend:

A) three or more consecutive years in poverty.
B) at least two consecutive months within a year in poverty.
C) three or more years in poverty.
D) at least six consecutive months within a year in poverty.

Question 22

In the United States today,households headed by single women are more likely to be poor than:

A) married families.
B) black males.
C) Hispanic males.
D) All of these are true.

Question 23

U.S.households headed by __________ are the most likely to be poor.

A) Hispanic males
B) those under age 18
C) single males
D) single women

Question 24

When the U.S.experiences economic growth,the poverty rate will:

A) fall, because growth has benefited everyone.
B) increase, because growth typically only benefits the richest 1 percent.
C) fall, because growth typically helps the poor more than the wealthy.
D) increase, because growth has benefited the wealthy more than the poor.

Question 25

The PPP index:

A) describes the overall inequality present in one country compared to another.
B) describes the overall differences in poverty levels between countries.
C) describes the overall difference in prices between countries.
D) None of these is true.

Question 26

Research shows programs like unemployment insurance,disability or health insurance,and job training can be effective in fighting:

A) both transient and chronic poverty.
B) transient poverty, but not chronic poverty.
C) chronic poverty, but not transient poverty.
D) neither transient nor chronic poverty.

Question 27

A program likely to make a big dent in chronic poverty is:

A) unemployment insurance.
B) health insurance.
C) job training.
D) none of the above are likely to be effective in reducing chronic poverty.

Question 28

More than a quarter of the population experiences ________ poverty at some point in their lives,perhaps due to losing a job or experiencing sickness or injury.

A) transient
B) abject
C) chronic
D) None of these is true.

Question 29

The percent of population that experiences transient poverty at some point in their lives is:

A) less than 10 percent.
B) approximately 12 percent.
C) more than 25 percent.
D) approximately 40 percent.

Question 30

Those who are considered the transient poor are defined as those who spend:

A) three or more years in poverty.
B) at least two consecutive months within a year in poverty.
C) two or more years in poverty.
D) at least six consecutive months within a year in poverty.

Question 31

Between 1960 and 1995,Social Security benefits:

A) increased, which increased the poverty rate among the elderly.
B) decreased, helping reduce the poverty rate among the elderly.
C) increased, helping reduce the poverty rate among the elderly.
D) decreased, which increased the poverty rate among the elderly.

Question 32

Today the greatest number of poor are _________ Americans,but the poverty rate for __________ Americans is higher.

A) white; black and Hispanic
B) black; white
C) black; Hispanic
D) white; Hispanic

Question 33

Between 1960 and 1995,Social Security benefits:

A) decreased from 35 percent down to 10 percent.
B) increased from 10 percent to 35 percent.
C) increased, decreasing the poverty rate among the elderly from 35 percent down to 10 percent.
D) decreased, increasing the poverty rate among the elderly from 10 percent to 35 percent.

Question 34

In 2012,the number of people living in the world on less than $1.90 a day was:

A) roughly 13% of the world's population.
B) just over a quarter of the world's population.
C) just over a fifth of the world's population.
D) just under 10 percent of the world's population.

Question 35

The region with the highest percentage of people who live on less than $1.90 a day is:

A) sub-Saharan Africa.
B) South Asia.
C) China.
D) None of these is true.

Question 36

Today black and Hispanic Americans have poverty rates:

A) three times as high as white Americans.
B) twice as high as white Americans.
C) half as high as white Americans.
D) four times as high as white Americans.

Question 37

Research suggests that about ______ percent of people living under the poverty line in any given year are chronically poor.

A) 3
B) 8
C) 13
D) 38

Question 38

The most common international poverty measure is:

A) the number of people living on less than $1.90 per day.
B) the number of people living on less than $5 per day.
C) the absolute poverty line, as defined by the U.S. Census Bureau.
D) the poorest 1 percent of income earners within a given country.

Question 39

An effective program used to fight transient poverty is:

A) unemployment insurance.
B) health insurance.
C) job training.
D) All of these are effective at fighting transient poverty.

Question 40

The greatest number of people who live on $1.90 a day live in:

A) China.
B) South Asia.
C) sub-Saharan Africa.
D) None of these is true.

Question 41

Overall,rapid economic growth between 1981 and 2012 has ______ the global poverty rate from __________________.

A) increased; below 20 percent to above 44 percent
B) decreased; above 30 percent to below 15 percent
C) decreased; above 44 percent to 12.7 percent
D) increased; below 12.7 percent to above 25 percent

Question 42

The set of skills,knowledge,experience,and talent that determine people's productivity as workers is called:

A) physical capital.
B) investment.
C) human capital.
D) educational training.

Question 43

Bad health is an example of:

A) a social digression.
B) a poverty trap.
C) a societal trap.
D) None of these is true.

Question 44

The poverty rate dropped from 84 percent in 1981 to 11.2 percent in 2010 in what country?

A) China
B) Chile
C) South Africa
D) India

Question 45

In the last few decades,the poverty rate in the US has

A) increased.
B) decreased.
C) changed little.
D) may have increased or decreased, we do not know for certain.

Question 46

The more human capital you have,the more likely you will:

A) be unemployable.
B) earn more money.
C) not benefit from specializing.
D) All of these are true.

Question 47

Does low human capital cause poverty or does poverty cause low human capital?

A) The causality works both ways.
B) Low human capital causes poverty, not the other way around.
C) Poverty causes low human capital, not the other way around.
D) There is no causal link between low human capital and poverty.

Question 48

Long-term solutions to communitywide poverty must involve:

A) ways to expand the range opportunities available to the population.
B) increasing the value of the currency.
C) ways to reduce taxes collected by local governments.
D) All of these are true.

Question 49

Evidence shows that children from poor communities typically have:

A) increased opportunities to acquire human capital.
B) reduced opportunities to acquire human capital.
C) equal opportunities to acquire human capital, but choose not to acquire as much on average than others.
D) equal opportunities to acquire human capital, and choose to acquire more on average than others.

Question 50

Which of the following areas of the world experienced virtually no change in its poverty rate from 1981 to 2010?

A) China
B) South Asia
C) India
D) sub-Saharan Africa

Question 51

Self- reinforcing mechanisms that cause the poor to stay poor are called:

A) social aberrances.
B) social networks.
C) poverty traps.
D) societal traps.

Question 52

A credit constraint is:

A) the inability to get a loan even though a person expects to be able to repay the loan plus interest.
B) the inability to repay a loan even though a person has acceptable credit history.
C) the ability to take on more loans than one can repay.
D) the maximum amount of load one is entitled to take.

Question 53

By monitoring financial diaries of several of the world's poorest families,economists found that a challenge facing the poor was:

A) they did save any money to pay down debts.
B) their income fluctuated a lot, in addition to being low.
C) they often did not diversify their savings and had "their eggs all in one basket".
D) All of these are true.

Question 54

A key to creating effective policy to fight poverty is to understand:

A) why people are poor.
B) the correlation between education and income.
C) the correlation between income and geographic location.
D) the unintended consequences of reductions in the incentive to work.

Question 55

Economists collect data on prices in every country and develop an index that describes the overall difference in prices between countries called the:

A) price parity purchasing index.
B) consumer price index.
C) consumer purchasing power index.
D) purchasing power parity index.

Question 56

The international poverty line at $1.90 a day at purchasing power parity means that in each country the poverty line is the amount that will allow you to buy a basket of goods equivalent to what $1.90 would buy:

A) in the United States.
B) in the richest of the countries that uses the index.
C) in the poorest of the countries that uses the index.
D) in the average economy of all the countries that use the index.

Question 57

Community-wide poverty:

A) is nonexistent in the developed world.
B) creates problems beyond those faced by poor individuals living in wealthier communities.
C) only creates problems in less wealthy countries.
D) None of these is true.

Question 58

You acquire human capital by:

A) getting an education.
B) investing in health care.
C) gaining experience in jobs.
D) All of these are true.

Question 59

The World Bank estimates that about ____ of the planet lives below $1.90 a day per person,and ____ lives on less than $3.10:

A) 1%; 35%.
B) 13%; 50%.
C) 35%; 50%.
D) 13%; 35%.

Question 60

The $1.90 (PPP)per day line was chosen by averaging the national poverty lines of 15 poor countries to represent:

A) chronic poverty by some globally comparable standard.
B) absolute poverty by some globally comparable standard.
C) transient poverty by some globally comparable standard.
D) relative poverty by some globally comparable standard.

Question 61

Most of Europe has relatively _______ inequality,and much of Latin America and southern Africa has relatively _________ inequality.

A) low; low
B) high; high
C) high; low
D) low; high

Question 62

The global pattern of inequality has:

A) remained surprisingly unchanged for the past several decades.
B) changed significantly after each World War.
C) been changing in recent decades.
D) not changed since the Great Depression redefined inequality for the world.

Question 63

The ______ the Lorenz curve is from/to the line of perfect equality,the _____ is the Gini coefficient,and the __________ income equality exists.

A) farther; higher; less
B) farther; higher; more
C) closer; higher; less
D) closer; lower; less

Question 64

Members of the top quintile of income earners in every country today:

A) earn disproportionately more than those in the bottom quintile.
B) earn disproportionately less than they did 100 years ago.
C) earn disproportionately less than those in the middle quintile.
D) All of these are true.

Question 65

A perfectly straight Lorenz curve would mean:

A) perfect inequality, and it does not exist in the real world.
B) perfect equality, and it does not exist in the real world.
C) perfect equality, and is more common among the wealthy, developed nations.
D) perfect inequality, and is more common among the developing nations.

Question 66

Inequality between countries,in terms of differences in their average national incomes,has been:

A) increasing over recent decades.
B) decreasing over recent decades.
C) decreasing since the 1930s.
D) increasing since the 1930s.

Question 67

In the United States,the top 20 percent of income earners earn:

A) over 60 percent of total income.
B) over 70 percent of total income.
C) just under 50 percent of total income.
D) just under 40 percent of total income.

Question 68

A Gini coefficient of zero indicates:

A) there is no income being earned.
B) Computed correctly the Gini coefficient only has values greater than zero.
C) perfect inequality.
D) perfect equality.

Question 69

The Gini coefficient is calculated by measuring the area between:

A) the line of perfect inequality and the Lorenz curve.
B) the line of perfect equality and the Lorenz curve.
C) the Lorenz curve and the x-axis.
D) the Lorenz curve and the y-axis.

Question 70

Which curve summarizes inequality visually?

A) Laffer curve
B) Income Inequality curve
C) Gini curve
D) Lorenz curve

Question 71

In the last few decades,income inequality in the United States has ___________ mostly because of the ____________

A) increased; poor getting poorer.
B) increased; gains by the rich.
C) decreased; gains by the poor.
D) decreased; stagnation by the economy in general.

Question 72

Perfect income equality means:

A) everyone earns exactly what they're worth.
B) everyone earns the exact same amount.
C) people earn different amounts based on what they do, but everyone in the same job earns the same amount.
D) everyone enjoys exactly the same standard of living.

Question 73

Most countries in the world have Gini coefficients ranging from:

A) 0.20 to 0.85.
B) 0.25 to 0.60.
C) 0.10 to 0.50.
D) 0.30 to 0.40.

Question 74

Those who believe that overall economic growth is more important than the distribution of income would say that:

A) if everyone is getting richer, the relative speed of these gains isn't as important.
B) it is fundamentally unjust for some people to have so much when others have so little.
C) if the society is not getting richer, then things can never become more equal.
D) All of these are true.

Question 75

The Lorenz curve demonstrates:

A) inequality visually; the more linear the curve, the less inequality exists.
B) inequality visually; the more linear the curve, the more inequality exists.
C) average income levels per capita; the more linear the curve, the less inequality exists.
D) average income levels per quintile; the more linear the curve, the more inequality exists.

Question 76

The Gini coefficient measures:

A) income inequality.
B) poverty prevalence.
C) average income per person.
D) change in average income per person over time.

Question 77

If the U.S.population were split into quintiles based on income,with the lowest quintile representing the poorest 20 percent,then those who earned the median income for the United States would be in the:

A) second quintile.
B) third quintile.
C) fourth quintile.
D) fifth quintile.

Question 78

If the population is split up into quintiles by income,the bottom quintile would include:

A) the poorest half of the population.
B) the poorest 60 percent of the population.
C) the richest half of the population.
D) the poorest 20 percent of the population.

Question 79

The Lorenz curve maps:

A) the cumulative percentage of the population against the cumulative percentage of income earned by those people.
B) each quintile of the population in order of income-earned against the average income earned by those people.
C) GDP per capita against what people really earn by quintile.
D) None of these describes what the Lorenz curve maps.

Question 80

The _________ bowed inward the Lorenz curve is,the __________ inequality exists.

A) less; more
B) more; less
C) more; more
D) None of these is true.