978-1259723223 Test Bank TBChap023 Part 1

Chapter 23 Income Inequality, Poverty, and Discrimination Answer Key

Multiple Choice Questions

1.

In 2014, the average income for households in the United States was about

2.

In the quintile distribution of income, the term “quintile” represents

3.

In 2014, a household with an annual income of $75,000 would find itself in the

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Blooms: Understand

Diff icult y: 02 Medium

Learning Objective: 23–01 Explain how income inequality in the United States is measured

and described.

Test Bank: I

Topic: Facts about Income Inequality

4.

In 2014, a household with an annual income of $23,000 would find itself in the

5.

The lowest quintile of households in the income distribution (as of 2014) receives about

6.

The highest quintile of households in the income distribution (as of 2014)

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D.

receives about 43 percent of the total income.

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Ac ce ss ib il it y: Keyboard Navigation

Blooms: Understand

Diff icu lty:

02 Medium

Learning Objective: 23–01 Explain how income inequality in the United States is measured

and described.

Test Bank: I

Topic: Facts about Income Inequality

7.

Quintile

(A) Income

(B) Income

(C) Income

(D) Income

Lowest

10%

15%

4%

22%

Second

20

14

10

17

Third

40

19

15

13

Fourth

20

22

23

40

Highest

10

30

48

8

Which of the income distributions in the accompanying table is closest to describing the United

States (as of 2014)?

8.

In 2014, the highest quintile of households in the U.S. income distribution received about

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B.

55 percent of total income.

C.

62 percent of total income.

D. 51 percent of total income.

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Ac ce ssi bi li t y:

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Blooms: Understand

Diff icult y: 02 Medium

Learning Objective: 23–01 Explain how income inequality in the United States is

measured and described.

Test Bank: I

Topic: Facts about Income Inequality

9.

Census data indicate that, as of 2014, the top fifth of all households receive about times as

much income as the bottom fifth.

10.

The Lorenz curve

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Test Bank: I

Topic: Facts about Income Inequality

11.

The Lorenz curve portrays

12.

The Gini ratio

13.

The Gini ratio of income inequality ranges between

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Ac ce ss ib il it y: Keyboard Navigation

Blooms: Understand

Diff icult y: 02 Medium

Learning Objective: 23–01 Explain how income inequality in the United States is measured

and described.

Test Bank: I

Topic:

Facts about Income Inequality

14.

Refer to the diagram, where curves (a) through (e) are Lorenz curves for five different countries.

Income is equally distributed in

15.

Refer to the diagram, where curves (a) through (e) are for five different countries. The Gini ratio

is lowest in country

16.

Refer to the diagram, where curves (a) through (e) are for five different countries. Of the

countries listed below, income is most unequally distributed in country

17.

Refer to the diagram, where curves (a) through (e) are for five different countries. The Gini ratio

is

18.

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive

annual incomes of $5,000, $2,500, $1,250, $750, and $500,

respectively. What percentage of

total income is received by the richest quintile?

23–10

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Blooms: Understand

Diff icu lty:

02 Medium

Learning Objective: 23–01 Explain how income inequality in the United States is measured

and described.

Test Bank: I

Topic:

Facts about Income Inequality

Type: Graph

19.

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive

annual incomes of $5,000, $2,500, $1,250, $750, and $500,

respectively. What percentage of

total income is received by the lowest 60 percent of the income receivers in population A?

20.

Suppose the members of population A, consisting of Al, Bob, Curt, Doris, and Ellie, receive

annual incomes of $5,000, $2,500, $1,250, $750, and $500,

respectively. The members of

population B, consisting of Fred, George, Holly, Irma, and Joan, receive incomes of $4,000,

$3,000, $1,250, $950, and $800, respectively. We

23–11

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Topic:

Facts about Income Inequality

Type: Graph

21.

The greater the area between the Lorenz curve and the diagonal in the Lorenz curve diagram,

the

22.

Which of the following Gini ratios indicates the highest degree of income inequality?

23.

Which of the following Gini ratios indicates the lowest degree of income inequality?

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Ac ce ss ib il it y: Keyboard Navigation

Blooms: Understand

Diff icu lty:

02 Medium

Learning Objective: 23–01 Explain how income inequality in the United States is measured

and described.

Test Bank: I

Topic: Facts about Income Inequality

24.

Which of the following countries has the highest Gini ratio, as of 2014?

25.

The movement of individuals and households from one income quintile to another over time

is called

26.

Income mobility

27.

Income mobility

28.

In the United States, the lifetime distribution of income is more equal than the annual

distribution. This statement is

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B. true because there is considerable income mobility over time.

C.

false because people tend to stay in the same income quintile over extended periods of time.

D.

false because the rich have gotten richer and the poor have gotten poorer.

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Ac ce ss ib il it y: Keyboard Navigation

Blooms: Understand

Diff icu lty:

02 Medium

Learning Objective: 23–01 Explain how income inequality in the United States is measured

and described.

Learning Objective: 23–02 Discuss the extent and sources of income inequality.

Test Bank: I

Topic: Causes of Income Inequality

T o p i c:

Facts about Income Inequality

29.

People’s incomes are relatively low when they are young, reach a peak in middle age, and

then decline. This fact helps explain

30.

Some economists have criticized standard government figures on income inequality, arguing

that these data

23–15

written consent of McGraw-Hill Education.

Blooms: Understand

Diff icult y: 02 Medium

Learning Objective: 23–01 Explain how income inequality in the United States is measured

and described.

Learning Objective: 23–02 Discuss the extent and sources of income inequality.

Test Bank: I

Topic: Causes of Income Inequality

T o p i c:

Facts about Income Inequality

31.

In the United States,

32.

Housing subsidies for low-income households

33.

Standard census data on the distribution of income

34.

Which of the following is a noncash transfer?

35.

Refer to the diagram. If line (c) represents the pretax and transfer distribution of income in the

United States, the post-tax and transfer distribution is best represented

by

36.

Refer to the diagram. If line (c) represents the distribution of income in 1975 in the United States,

we would expect the distribution of income for 2014 to be more

like

37.

Refer to the diagram. If line (c) represents the distribution of income before taxes and transfers

and line (b) represents the distribution after taxes and transfers, then

taxes and transfers have

38.

Each of the following contributes to income inequality except

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Diff icult y: 02 Medium

Learning Objective: 23–02 Discuss the extent and sources of income inequality.

Test Bank: I

Topic: Causes of Income Inequality

39.

If discrimination based on gender and race was eliminated, we would expect the

40.

Differences in the amounts and quality of education and training

41.

One cause of income inequality in the United States is