477 Government payments to individuals for which no good or service is produced for the government in exchange are government spending Incorrect government purchases Incorrect government spending on goods and services Incorrect transfer payments True Answer Correct 478 payment Which of the following transactions is a transfer The government pays an employee by making a direct transfer to the employee s bank account Incorrect An army officer paid by the government transfers part of the money he receives to the government to pay his taxes Incorrect A senior citizen receives a Social Security payment True Answer Correct All of these are transfer payments Incorrect An example of a social insurance program is expenditure on national defense Incorrect Social Security payments to the disabled True Answer Correct the food stamp program Incorrect purchasing a new city police car Incorrect Which of the following is the best example of social insurance liability insurance for automobiles Incorrect food stamps Incorrect housing subsidies Incorrect Social Security True Answer Correct Children raised in poverty have a greater likelihood of living in poverty as adults than do those raised in nonpoor families because low income is highly correlated with higher high school dropout rates Incorrect risk of mental problems and behavioral disorders Incorrect rates of illness and hospitalization Incorrect high school dropout rates risk of mental problems and 479 480 481 482 483 484 485 486 in the percentage of the population living below the behavioral disorders and with higher rates of illness and hospitalization True Answer Correct Given that the definition of poverty has not been adjusted to reflect the long term rise in incomes you would expect poverty line a decrease True Answer Correct an increase Incorrect no change Incorrect It is impossible to determine how the percentage of the population living in poverty might change Incorrect Which of the following is not a leading cause of poverty in the United States lack of adequate employment Incorrect lack of education Incorrect the welfare system True Answer Correct discrimination Incorrect Which of the following is not a major cause of poverty in the United States educational attainment Incorrect discrimination Incorrect lack of adequate health coverage Incorrect welfare True Answer Correct The percentage of the population that falls below the poverty line is called the poor rate Incorrect poverty rate True Answer Correct homeless rate Incorrect absolute number of people in poverty Incorrect The percentage of the U S population living in poverty in 2009 was slightly less than 15 True Answer Correct 20 to 24 Incorrect 25 to 29 Incorrect greater than 30 Incorrect 487 Which of the following is associated with poverty lack of adequate employment Incorrect lack of education Incorrect lack of proficiency in English Incorrect lack of adequate employment lack of education and lack of proficiency in English True Answer Correct 488 The poverty line is adjusted each year to reflect changes in the cost of living True Answer Correct changes in the size of the average family Incorrect the long term rise in the average standard of living Incorrect changes in the cost of living and changes in the size of the average family Incorrect The single most important factor influencing children s later socioeconomic attainment is parental income True Answer Correct education Incorrect health care Incorrect geographic mobility Incorrect In 2009 which of the following demographic groups had the highest poverty rate African Americans Incorrect Hispanics Incorrect Whites Incorrect female headed families with no husband present True Answer Correct The poverty threshold for a household with one person in 2010 was about 11 300 True Answer Correct about 21 100 Incorrect about 25 600 Incorrect about 38 000 Incorrect 489 490 491 492 America s poverty rate is than that of most 493 494 higher developing nations Incorrect higher other wealthy nations True Answer Correct just a little lower other wealthy nations Incorrect no lower developing nations Incorrect During the past 25 years the degree of income inequality in the United States has been rising Which of the following is not a possible reason for this phenomenon technological progress that has increased the demand for high skilled workers relative to the demand for low skilled workers Incorrect increased imports of labor intensive products Incorrect increased immigration Incorrect higher divorce rates True Answer Correct Economists believe that looking at the distribution of income by quintiles at one point in time overstates the true inequality of income because it ignores the effect of taxes Incorrect it ignores the effect of transfer payments Incorrect families near the bottom of the distribution in any given year may be having an unusually bad year while those at the top may be having an unusually good one True Answer Correct families near the bottom of the distribution in any given year are often having an unusually good year while those at the top are often having an unusually bad one Incorrect 495 In the United States the mobility between income groups is relatively high True Answer Correct relatively low Incorrect high only for the top two groups Incorrect very rare Incorrect 496 Studies of family income over time reveal that most people in the lowest quintile tend to stay there over their lifetime Incorrect income mobility is rare for all quintiles of the income distribution Incorrect many people who move down the income ladder are young Incorrect many people who start out at the bottom of the income ladder when they are young move up the income ladder as they age and move down again when they retire True Answer Correct There is considerable among the quintiles of the distribution of income with many families moving from immobility lower to higher higher to lower Incorrect mobility higher to lower lower to higher True Answer Correct immobility lower to lower higher to higher Incorrect stability lower to higher higher to higher Incorrect and others moving from quintiles The is widely used to measure income inequality Gini coefficient True Answer Correct median household income Incorrect poverty rate Incorrect ability to pay principle Incorrect The identifies the income at which half of the households in the population earn more and half of the population earns less median household income True Answer Correct mean
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