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PAGE 1366 ? Chapter 20/Income Inequality and Poverty
Chapter 20/Income Inequality and Poverty ? PAGE 1365
PAGE 1347
Chapter 20
Income Inequality and Poverty
TRUE/FALSE
1. The poverty line is set by the government so that 10 percent of all families fall below that line and are thereby classified as “poor.”
ANS: F DIF: 1 REF: 20-1
NAT: Analytic LOC: The study of economics, and definitions of economics
TOP: Poverty line MSC: Definitional
2. The United States has more income inequality than Japan, Germany, and Canada.
ANS: T DIF: 1 REF: 20-1
NAT: Analytic LOC: The study of economics, and definitions of economics
TOP: Income inequality MSC: Definitional
3. The United States has more income inequality than Brazil and South Africa.
ANS: F DIF: 1 REF: 20-1
NAT: Analytic LOC: The study of economics, and definitions of economics
TOP: Income inequality MSC: Definitional
4. Standard measurements of the degree of income inequality take both money income and in-kind transfers into account.
ANS: F DIF: 2 REF: 20-1
NAT: Analytic LOC: The study of economics, and definitions of economics
TOP: In-kind transfers | Income inequality MSC: Definitional
5. John Rawls, who developed the way of thinking called liberalism, argued that government policies should be aimed at maximizing the sum of utility of everyone in society.
ANS: F DIF: 2 REF: 20-2
NAT: Analytic LOC: The role of government TOP: Utility
MSC: Interpretive
6. One existing government program that works much like a negative income tax is the Earned Income Tax Credit.
ANS: T DIF: 2 REF: 20-3
NAT: Analytic LOC: The role of government TOP: Negative income tax
MSC: Interpretive
7. One existing government program that works much like a negative income tax is Medicaid.
ANS: F DIF: 2 REF: 20-3
NAT: Analytic LOC: The role of government TOP: Negative income tax
MSC: Interpretive
8. The invisible hand of the marketplace acts to allocate resources efficiently, but it does not necessarily ensure that resources are allocated
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