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88. Social Security was established in the:
a. 1930s to provide retirement income to those with a work history.
b. 1930s to provide jobs for the unemployed.
c. 1930s to provide low-income households with redeemable food vouchers.
d. 1960s to provide medical care to low-income families.
e. 1960s to provide cash transfers to the elderly and the poor with dependent children.
89. In the United States, _____.
a. insurance premiums are deducted from workers’ pay to pay for social insurance programs
b. anyone with children is entitled to receive the benefits of social insurance programs
c. anyone over 65 is eligible to receive the benefits of social insurance programs
d. all taxpayers are eligible to receive the benefits of social insurance programs
e. all poor families with children are eligible to receive the benefits of social insurance programs
90. Which of the following is a social insurance program?
a. Medicaid
b. Food stamps
c. Unemployment compensation
d. Temporary Assistance for Needy Families
e. Supplemental Security Income
91. Medicare is a(n):
a. social insurance program that provides health insurance only to people who suffer from work-related injuries or
disabilities.
b. income assistance program that provides cash benefits to the elderly and the poor.
c. social insurance program that provides health insurance to people aged 65 years and above, regardless of income.
d. income assistance program that supplements the wages of the working poor.
e. social insurance program that provides health insurance to the poor depending on their income level.
92. In order to qualify for unemployment insurance and worker’s compensation, a person must have:
a. paid taxes the previous year.
b. an employment record.
c. a family of four.
d. proof of disability.
e. a work experience of at least ten years.
93. The social insurance system generally redistributes income from:
a. the rich to the poor and from old to young.
b. the rich to the poor and from young to old.
c. the poor to the rich and from old to young.
d. the producers to the consumers of a good.
e. the consumers to the producers of a good.
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94. Which of the following is not a form of social insurance?
a. Social Security
b. Temporary Assistance for Needy Families
c. Medicare
d. Unemployment insurance
e. Workers’ compensation
95. Transfer programs that do not tie benefits to contributions are called:
a. social insurance programs.
b. income assistance programs.
c. health aid programs.
d. health insurance programs.
e. compensation programs.
96. Which of the following is true of income assistance programs?
a. These require that the recipient work and contribute to the program.
b. These are designed to replace lost income.
c. These include unemployment compensation and Medicare.
d. These are funded exclusively by the federal government.
e. These include both cash and in–kind transfer programs.
97. A major difference between social insurance and income assistance programs is that:
a. social insurance programs are run by the state governments and income assistance programs are run by the federal
government.
b. funding for social insurance programs comes exclusively from the federal government, whereas income assistance
programs are funded both by the state and federal governments.
c. benefits from social insurance programs are related to a worker’s work history, whereas benefits from income
assistance programs are not.
d. social insurance programs are available only to households with children, whereas income assistance programs
are available to all citizens above the age of 18 years.
e. income assistance programs are available only to households without children, whereas income assistance
programs are available only to single mothers with children.
98. In a means-tested program, a household qualifies for welfare benefits only if:
a. the household’s income and assets are below a certain level.
b. the head of the household has a college degree.
c. the head of the household is a single mother.
d. the family has dependent children.
e. one of the members of the household is a war veteran.
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99. Mary can qualify for benefits under a means-tested transfer payment program if _____.
a. she has worked and contributed to the program
b. she is able to repay the cash transfer at a later date
c. she is the head of her household and holds a job
d. she is totally disabled
e. her household income is below a certain level
100. Which of the following is not a means-tested program?
a. Temporary Assistance for Needy Families (TANF)
b. Supplemental Security Income (SIS)
c. The Food Stamp program
d. Social Security payments to a retiree
e. Free and reduced-price school lunches for the poor
101. Temporary Assistance for Needy Families and Supplemental Security Income are:
a. cash transfers for income assistance.
b. cash transfers for social insurance.
c. in-kind transfers for income assistance.
d. in-kind transfers for social insurance.
e. intended to provide health care for the poor.
102. Cash transfers made by the U.S. government:
a. increase as family income from other sources rises.
b. decrease as family income from other sources rises.
c. are a part of social insurance programs.
d. are not a part of the means-tested programs of the federal government.
e. increase as the number of years a person has worked rises.
103. One feature of the Temporary Assistance for Needy Families (TANF) program is that it:
a. provides low-cost housing to needy and poor families.
b. provides free accommodation and food to needy families.
c. is controlled by state governments and does not carry any federal entitlement.
d. is a federal entitlement program.
e. is a part of Social Security and collects contributions from employed people.
104. Most states offer _____ to those who are poor but do not qualify for Temporary Assistance for Needy Families
(TANF) or Supplemental Security Income (SSI).
a. Medicare
b. Medicaid
c. General Assistance
d. Social Security
e. The earned-income tax credit
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105. The federal government’s earned-income tax credit:
a. provides support only for elderly and disabled poor.
b. represents a type of in-kind transfer program.
c. provides food assistance to the working poor.
d. reduces taxes if the poor buy housing.
e. offers cash transfers to the working poor by reducing their taxes.
106. Under the earned-income tax credit program, ______.
a. a low-income family would receive free education for its children
b. a low-income family would not have to pay federal income tax
c. people whose income is above a certain level would receive tax exemptions
d. the federal government taxes the rich at a higher rate than the poor
e. the federal government taxes the poor at a rate higher than their earned income
107. Which of the following is an in-kind transfer payment?
a. Medicaid
b. Social Security
c. Workers’ compensation
d. Unemployment insurance
e. Temporary Assistance to Needy Families
108. The largest welfare program in the United States, costing more than all cash and other in-kind transfer programs
combined, is:
a. Social Security.
b. Medicaid.
c. Temporary Assistance for Needy Families.
d. Unemployment insurance.
e. General Assistance.
109. Which of the following programs accounts for nearly a quarter of a typical state’s budget in the United States?
a. Aid to Families with Dependent Children
b. Medicaid
c. Social Security
d. Unemployment compensation
e. Food stamps
110. The qualifying income level for Medicaid:
a. is $10,000.
b. is $14,000.
c. is set separately by each state.
d. is set yearly by the United States Census Bureau.
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e. varies inversely with the number of children in a family.
111. Which of the following is true of Medicaid?
a. Medicaid beneficiaries do not receive Medicare.
b. States do not receive any grants from the federal government to cover their Medicaid budget.
c. The proportion of poor people covered by Medicaid is determined by the federal government.
d. The proportion of poor people covered by Medicaid varies across states.
e. Medicaid has been replaced by Medicare in recent years.
112. The Supplemental Nutrition Assistance Program provides:
a. the nutritional detail of each food item consumed by households.
b. cash transfers to the poor.
c. cash transfers to the elderly.
d. vouchers that can be redeemed for food.
e. food deliveries to the elderly.
113. The federal government of the United States has major assistance programs aimed at providing all of the following
goods, except one. Which is the exception?
a. Housing
b. Energy
c. School lunches
d. Clothing
e. Education
114. Which of the following accounts for approximately three-fourths of all welfare spending?
a. Social Security
b. The earned-income tax credit
c. Unemployment compensation
d. In-kind transfer
e. Temporary Assistance for Needy Families (TANF)
115. Data shows that:
a. the elderly are the poorest demographic group in the United States because Social Security payments have not
kept pace with inflation.
b. the elderly are the poorest demographic group in the United States because they do not have a steady income.
c. the elderly are the poorest demographic group in the United States because poverty increases with age.
d. those under 18 years of age are the poorest demographic group in the United States.
e. those between 40 and 50 years of age are the poorest demographic group in the United States.
116. For which of the following groups has the poverty rate declined most in the United States?
a. Households headed by single parents
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b. Households headed by married couples
c. Less-educated African-Americans
d. African-Americans with high school but not college educations
e. People above 65 years of age
117. Social Security and Medicare:
a. have not succeeded in reducing the incidence of poverty among the elderly.
b. have succeeded in reducing the incidence of poverty among those below 18 years of age.
c. have succeeded in reducing the incidence of poverty among the elderly.
d. have not succeeded in reducing the incidence of poverty among those between 18 and 64 years of age.
e. have succeeded in redistributing income from the old to the young.
118. One of the reasons for the decline in the poverty rate among the elderly can be attributed to:
a. the Temporary Assistance for Needy Families (TANF) program.
b. decreases in personal income tax rates.
c. Medicaid.
d. the political power of the elderly.
e. increased resource earnings.
119. Which of the following groups are not concerned about the special interests of the elderly?
a. The elderly themselves
b. Those under 65 years of age who are concerned about the current benefits of their parents
c. The housing industry
d. Doctors and nursing-home operators
e. Those under 65 years of age who are concerned about their future benefits
120. Analysis of the poverty rates in the United States indicates that:
a. there has been a feminization of poverty.
b. outsourcing has increased the incidence of poverty among educated workers.
c. outsourcing has decreased the incidence of poverty among educated workers.
d. the elderly have benefitted the least from the welfare benefit programs.
e. the poverty rate was low during recessions.
121. One of the reasons behind the feminization of poverty is that:
a. social insurance programs do not cover unmarried females.
b. income assistance programs do not cover married females.
c. the number of people in female-headed households has increased at a faster rate than the number of people in
other families.
d. technological changes have lowered the income of female workers more than the income of male workers.
e. the number of people in female-headed households has increased at a slower rate than the number of people in
other families.
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122. The increase in the number of poor families in the United States since 1965 can be attributed to a(n):
a. increase in the number of households headed by females.
b. decrease in the number of jobs in the U.S. economy in the last fifty years.
c. increase in the proportion of people above the age of 65 years in the population.
d. decrease in the unemployment rate in the U.S. economy.
e. slowdown in the rate of growth of the U.S. economy.
123. If the fraction of the population below the official poverty level has decreased,
a. the number of poor must have increased.
b. the number of poor must have decreased.
c. the population must have increased.
d. the number of poor may have increased or decreased.
e. the number of people above the official poverty level must have increased.
124. In the last 30 years, the number of poor people in the United States in households headed by women has:
a. been constant.
b. increased slightly.
c. increased dramatically.
d. decreased slightly.
e. decreased by half.
125. The U.S. infant mortality rate:
a. is lower than the mortality rates in other industrialized countries.
b. is higher than the mortality rates in other industrialized countries.
c. is the same as the mortality rates in other industrialized countries.
d. is not related to the poverty rate.
e. is inversely related to the poverty rate.
126. Which of the following groups has the fastest-growing population in the United States?
a. Households headed by female members
b. Households headed by male members
c. Households headed by married couples
d. Households headed by African Americans
e. Households headed by Hispanics
127. Over the last forty years, poverty in the United States, as measured by the number of poor, has increased the most:
a. among households headed by white males.
b. among women because of a high divorce rate.
c. among households headed by women.
d. among the elderly because of cutbacks in the Social Security program.
e. among men because of a lack of job opportunities for them.
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128. Which of the following contributed most to the large increases in poverty since 1960?
a. The failure of the Social Security system
b. Federal government budget deficits
c. An increase in the number of retirees
d. An increase in poverty rates among households headed by African Americans
e. An increase in the number of households headed by females
129. Which of the following would not account for the observed wage differential between African Americans and whites
in the United States?
a. Differences in the quantity of on-the-job training
b. Differences in the quality of education
c. Discrimination by employers
d. Differences in job experience
e. Differences in access to public assistance programs
130. Which of the following is true?
a. African-American workers receive more on-the-job training than otherwise similar white workers.
b. African-American workers receive a higher quality of schooling than white workers.
c. African-American workers receive less on-the-job training than otherwise similar white workers.
d. African-American workers receive a higher wage than other similar white workers.
e. The unemployment rate is lower among African-American workers than white workers.
131. The Equal Employment Opportunity Commission:
a. was established by the Equal Rights Act of 1984.
b. examines cases in which a worker is not paid the same as others performing the same work.
c. guarantees a worker’s right to a job.
d. established a minimum wage for minorities.
e. has effectively eliminated racial discrimination in the workplace and has made on-the-job training mandatory for
all workers.
132. The Equal Employment Opportunity Commission was established to:
a. expand the safety net for unemployed workers.
b. encourage self-employment and self-sufficiency among black workers.
c. monitor cases involving unequal access to promotion.
d. protect the rights of the workers in the unorganized sector.
e. protect the rights of the workers in the organized sector.
133. The requirement that firms doing business with the federal government set numerical hiring, promotion, and training
goals was meant to:
a. increase the income level of households headed by females.
b. lower the disparity in wages between white and black workers.
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c. increase the demand for skilled labor.
d. organize the unskilled labor force and help them form labor unions.
e. protect the rights of workers affiliated to labor unions.
134. Data on the U.S. income distribution suggests that:
a. African-American-white earnings gap has reduced substantially and has almost merged.
b. African-American -white income differentials have increased.
c. the distribution of income among African-American is more uneven than the overall distribution of income.
d. the distribution of income among African-American is less uneven than the overall distribution of income.
e. the distribution of income among African-American follows approximately the same pattern as the overall
distribution of income.
135. Which of the following is true of income assistance benefits?
a. They decrease as earned income increases.
b. They are taxed at a 20 percent marginal rate.
c. They are taxed at a low marginal rate in order to provide work incentives.
d. They are unaffected by increases in earned income.
e. They are positively related to income from other sources.
136. An unintended consequence of an expanded safety net is a(n):
a. reduction in the incentive to work and earn.
b. increase in the supply of labor in the manufacturing sector.
c. increase in the supply of labor in the agricultural sector.
d. increase in the supply of labor in the service sector.
e. reduction in the demand for labor.
137. Welfare benefits:
a. discourage poor people from looking for jobs.
b. encourage employment and self-sufficiency.
c. cause an improvement in job skills.
d. are always in the form of cash.
e. are always in the form in in-kind transfers.
138. In reference to welfare recipients, the high effective marginal tax rate on earnings _____.
a. encourages people to become self-employed
b. encourages more labor market activity
c. discourages self-sufficiency
d. increases total family income if the marginal tax rate exceeds 100 percent
e. tends to increase welfare benefits as more income is earned up to the “means-test” threshold
139. Welfare data shows that:
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a. there may be unfavorable long-term consequences of welfare benefits.
b. welfare encourages young women to have children.
c. children brought up on welfare never remain on welfare as adults.
d. welfare benefits and other sources of income are directly related.
e. income-assistance programs increase the supply of labor by 40 percent.
140. It is difficult to say whether welfare “causes” daughters from welfare families to be more likely to participate in the
welfare system themselves. This is because:
a. the same factors that contribute to a mother’s welfare status can also contribute to her daughter’s welfare status.
b. no research has been done on this topic.
c. economists are unconcerned with questions about the welfare status of children from welfare households.
d. welfare benefits are not extended to daughters from welfare families as it would lead to an over dependence on
welfare benefit programs.
e. economists have not been able to establish any correlation between welfare received by mothers and welfare
received by daughters.
141. Some unintended consequences of income assistance arise because:
a. these programs are subject to fraud, abuse, and clerical errors.
b. these programs are not under the control of the federal government.
c. people prefer part-time jobs to full-time jobs.
d. the demand for skilled labor decreases as a result of these programs.
e. the demand for unskilled labor decreases as a result of these programs.
142. Which of the following is not an example of a “workfare” component in a welfare program?
a. On-the-job training
b. Required job searches
c. Tougher child support laws
d. Required work in paid or unpaid jobs
e. Required participation in training programs
143. The “workfare” component in welfare programs was introduced to:
a. decrease the demand for skilled labor.
b. decrease the demand for unskilled labor.
c. decrease the supply of skilled labor.
d. expose people to the job market.
e. reduce the workload of people employed in industries.
144. A consequence of the “workfare” component in welfare programs was that:
a. the government incurred huge federal deficits while running this program.
b. the government saved money because people in this program left welfare sooner.
c. it led to the unionization of the workforce.
d. it increased the dependency on welfare programs and people continued to be on welfare for decades.
e. it reduced the incentives of out-of-work workers to find employment.
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145. A preliminary conclusion about welfare reform is that:
a. work requirements have led to substantial declines in welfare caseloads.
b. work requirements cause welfare caseloads to increase.
c. such reform can only be instituted when the growth rate of an economy is high.
d. such reform can be instituted even when the there is a high level of national debt.
e. welfare rolls decline faster when an economy is in recession because more people need welfare benefits during
those times.
146. Most people on welfare benefit programs in the United States are:
a. immigrants.
b. poorly educated and have limited job skills.
c. not eligible for food stamps, child care, or Medicaid.
d. employed part-time.
e. below the age of 16 years.
147. Which of the following is true of welfare reforms in the United States?
a. Almost all individuals leaving welfare have full-time jobs.
b. The earned-income tax credit was discontinued after the introduction of the Social Security program.
c. Single mothers who head families have found jobs.
d. Former welfare recipients who are now working find that they no longer qualify for food stamps, child care, or
Medicaid.
e. Welfare rolls remained stable during the late 1990s and the early twenty-first century.
148. As welfare rolls declined during the late 1990s and early 2000s, _____.
a. states with stringent work requirements found that their federal grants also declined
b. states with stringent work requirements were rewarded with larger federal grants
c. few welfare recipients were able to find jobs
d. welfare spending per recipient increased significantly
e. states cut back on their provision of services such as job placement and child care
149. One effect of welfare reform has been a(n):
a. increase in the dependence on food vouchers.
b. decrease in the dependency of children in welfare households on welfare benefit programs.
c. significant decrease in federal grants to states.
d. decrease in the employment rate of African Americans.
e. substantial increase in employment among mothers who head families.
150. Which of the following is a result of welfare reform?
a. Employment among mothers who head families substantially decreased.
b. About two-thirds of mothers who head families found work only eight years after reform.
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c. The incomes of mothers who head families went down on an average.
d. Welfare spending per recipient decreased significantly.
e. Most states combined tough new eligibility rules with an expanded menu of welfare services.