Question 1

Since 1973, poverty has generally increased in the United States.

Accepted Answer

A) True 
 B)False

Question 2

One advantage of a wage subsidy over a minimum wage is the fact that:

Accepted Answer

A)  the wage subsidy will not increase work effort. 
B)  a wage subsidy will be more target efficient than a minimum wage. 
C)  the wage subsidy will reduce unemployment among the working poor. 
D)  All of the above.

Question 3

The benefit that an individual receives when they have no income is referred to as:

Accepted Answer

A)  the net benefit. 
B)  the break-even benefit. 
C)  the basic benefit. 
D)  the maximum benefit.

Question 4

Government transfers may indirectly decrease the income of the poor by reducing work effort.

Accepted Answer

A) True 
 B)False

Question 5

Suppose the break-even net income is $700 and the basic benefit is $350. What is the benefit reduction rate?

Accepted Answer

A)  20 percent. 
B)  30 percent. 
C)  40 percent. 
D)  50 percent.

Question 6

Many economists are not satisfied with the official measure of poverty because:

Accepted Answer

A)  the official measure of poverty does not adjust for price changes. 
B)  the official measure of poverty does not adjust for family size. 
C)  the official measure of poverty adjusts for the effect of taxes on income. 
D)  the official measure of poverty excludes relevant and important sources of income.

Question 7

Suppose the benefit is $175, the benefit reduction rate is 40 percent, and net income is $100. What is the basic benefit?

Accepted Answer

The answer of Suppose the benefit is $175, the benefit...

Question 8

All of the following have contributed to the growth in female-headed households except:

Accepted Answer

A)  an increase in divorce rates. 
B)  a decline in out-of-wedlock childbearing. 
C)  a decline in remarriage rates. 
D)  a decline in marriage rates.

Question 9

Which of the following is an example of cash assistance?

Accepted Answer

A)  Food Stamps. 
B)  Housing Assistance. 
C)  Supplemental Security Income. 
D)  Medicaid.

Question 10

TANF likely has an adverse effect on work effort because:

Accepted Answer

A)  it goes to households with dependent children. 
B)  it has a relatively high benefit reduction rate. 
C)  it has a relatively low benefit reduction rate. 
D)  it is targeted towards female-headed households.

Question 11

When an individual's resources are not sufficient to provide a minimum standard of living, they are considered poor.

Accepted Answer

A) True 
 B)False

Question 12

The Child Care and Development Fund (CCDF):

Accepted Answer

A)  is a federal government bloc grant that provides the states with money to help low-income working families pay for childcare. 
B)  is a federal program that allows an employer to provide up to $5,000 in assistance to employees to help them pay certain child and dependent care expenses, childcare included. 
C)  provides up to $500 per dependent child under age 17 for single taxpayers with income of $84,000 or less, and for married taxpayers with income of $119,000 or less. 
D)  is provided by about half of the state governments to provide a credit against income tax liability for childcare expenses for working taxpayers.

Question 13

In order to determine the target efficiency of a program, the:

Accepted Answer

A)  basic benefit should be examined. 
B)  the benefit reduction rate should be examined. 
C)  the break-even net income should be examined. 
D)  the benefit should be examined.

Question 14

Jack and Jill are both drillers for Mother Goose Well, Inc. They are equally qualified for the position, but Jack receives a higher salary than Jill. This is an example of:

Accepted Answer

A)  labor market discrimination. 
B)  nonemployment discrimination. 
C)  occupational discrimination. 
D)  the male-female wage differential.

Question 15

Increasing unemployment, the changing composition of the poverty population, and the effects of government transfers on work incentives all contribute to the increase in the pre-transfer poverty rate.

Accepted Answer

A) True 
 B)False

Question 16

Over the past 40 years, there has been a significant reduction in the poverty rate for persons living in female-headed families.

Accepted Answer

A) True 
 B)False

Question 17

All of the following help to explain the increase in the pre-transfer poverty rate over the 1979-2001 time period except:

Accepted Answer

A)  the changing composition of the poverty population. 
B)  a decline in government transfers. 
C)  the increasing incidence of unemployment. 
D)  the impact of government transfers on work incentives.

Question 18

In order to provide earnings supplements to the working poor government could:

Accepted Answer

A)  lift restrictions that prevent the working poor from receiving AFDC payments. 
B)  provide a wage subsidy to the working poor. 
C)  lower the minimum wage so that employers would be willing to hire more of the working poor. 
D)  extend Medicaid coverage to the working poor.

Question 19

When the general price level increases, government:

Accepted Answer

A)  increases the poverty threshold. 
B)  decreases the poverty threshold. 
C)  does not change the poverty threshold. 
D)  increases the earned-income tax credit.

Question 20

Which of the following statements is correct?

Accepted Answer

A)  The poverty rate in the United States has fallen since 1959. 
B)  Large increases in government cash transfers account for part of the increase in the poverty rate in the United States over the 1959-1973 period. 
C)  Rapid economic growth contributed to a decline in the poverty rate in the United States during the 1959-1973 period. 
D)  Benefits provided by cash transfer programs caused the poverty rate to be higher in the 1970s than it would have been in the absence of these programs.

Exam 11: Poverty: Old and New Approaches to a Persistent Problem

Since 1973, poverty has generally increased in the United States.

One advantage of a wage subsidy over a minimum wage is the fact that:

The benefit that an individual receives when they have no income is referred to as:

Government transfers may indirectly decrease the income of the poor by reducing work effort.

Suppose the break-even net income is $700 and the basic benefit is $350. What is the benefit reduction rate?

Many economists are not satisfied with the official measure of poverty because:

Suppose the benefit is $175, the benefit reduction rate is 40 percent, and net income is $100. What is the basic benefit?

All of the following have contributed to the growth in female-headed households except:

Which of the following is an example of cash assistance?

TANF likely has an adverse effect on work effort because:

When an individual's resources are not sufficient to provide a minimum standard of living, they are considered poor.

The Child Care and Development Fund (CCDF) :

In order to determine the target efficiency of a program, the:

Jack and Jill are both drillers for Mother Goose Well, Inc. They are equally qualified for the position, but Jack receives a higher salary than Jill. This is an example of:

Increasing unemployment, the changing composition of the poverty population, and the effects of government transfers on work incentives all contribute to the increase in the pre-transfer poverty rate.

Over the past 40 years, there has been a significant reduction in the poverty rate for persons living in female-headed families.

All of the following help to explain the increase in the pre-transfer poverty rate over the 1979-2001 time period except:

In order to provide earnings supplements to the working poor government could:

When the general price level increases, government:

Which of the following statements is correct?