Chapter 35 – Poverty and Welfare
Chapter 35 Poverty and Welfare
Multiple Choice
1. The poverty line is
A) that level of income just sufficient to provide a family with a minimally adequate
standard of living.
B) the percentage of households with income insufficient to provide an adequate standard of
living.
C) the amount of money that would have to be transferred to poor households to lift them
out of poverty.
D) the amount of money the poor earn from work.
2. The poverty rate is
A) that level of income sufficient to provide a family with a minimally adequate standard of
living.
B) the percentage of people in households with income under the poverty line.
C) the total amount of money that would have to be transferred to households in poverty to
raise them out of poverty.
D) the amount of money the poor must earn from work.
3. The poverty gap is
A) that level of income sufficient to provide a family with a minimally adequate standard of
living.
B) the percentage of people in households with income under the poverty line.
C) the total amount of money that would have to be transferred to households in poverty to
lift them out of poverty.
D) the amount of money the poor must earn from work.
4. The level of income sufficient to provide a family with a minimally adequate standard of
living is the
A) poverty line.
B) poverty rate.
C) poverty gap.
D) poverty state.
Chapter 35 – Poverty and Welfare
5. The percentage of people in households with income under that which is sufficient to provide
a family with a minimally adequate standard of living is the
A) poverty line.
B) poverty rate.
C) poverty gap.
D) poverty state.
6. The total amount of money that would have to be transferred to households in poverty to
raise them out of poverty is the
A) poverty line.
B) poverty rate.
C) poverty gap.
D) poverty state.
7. As of 2009, the poverty gap in the U.S. was roughly
A) $16 billion.
B) $79 billion.
C) $862 billion.
D) $8.62 trillion.
8. The Poverty Line goes up as the size of the household increases. A doubling of the family
size
A) more than doubles the poverty line.
B) less than doubles the poverty line.
C) exactly doubles the poverty line.
9. The Poverty rate has hovered between ______ since 1969.
A) 5-10%
B) 11-15%
C) 16-20%
D) 20-25%
Chapter 35 – Poverty and Welfare
10. If the poverty line for a family of 2 is $10,000 then the poverty line for a family of 4 is likely
to be
A) greater than $20,000.
B) less than $20,000 but greater than $10,000.
C) exactly $10,000.
D) less than $10,000.
11. If the poverty line for a family of 4 is $16,000 then the poverty line for a family of two is
likely to be
A) greater than $16,000.
B) less than $16,000 but greater than $8,000.
C) exactly $8,000.
D) less than $8,000.
12. If the poverty line is $16,000 for a family of four and the US has 100 million such families,
with 25 million of these families having incomes of $12,000 and 75 million having incomes
of $20,0This means the poverty gap would be
A) zero, because the income numbers average out at $16,000.
B) negative, because there are more above the poverty line than below it.
C) $100 billion, because there are 25 million families $4000 below the poverty line.
D) $400 billion, because there are 100 million families and many are $4000 below the
poverty line.
13. The majority of the poor are
A) white, non-Hispanic.
B) Hispanic.
C) black, non-Hispanic.
D) no one ethnic group makes up the majority.
14. Which of the following is true about poor populations?
A) There are more poor whites than poor blacks.
B) The poor are disproportionately black and Hispanic
C) The poor are more likely to be children than the elderly
D) all of the options are correct.
Chapter 35 – Poverty and Welfare
15. Which of the following is true about poor populations?
A) There are more poor whites than poor blacks.
B) The poor are disproportionately white.
C) The poor are less likely to be children than the elderly.
D) The poor are more likely to have graduated from high school.
16. Which of the following is true about poor populations?
A) There are fewer poor whites than poor blacks.
B) The poor are disproportionately black and Hispanic.
C) The poor are less likely to be children than the elderly.
D) The poor are more likely to have graduated from high school.
17. Which of the following is true about poor populations?
A) There are fewer poor whites than poor blacks.
B) The poor are disproportionately white.
C) The poor are more likely to be children than the elderly.
D) The poor are more likely to have graduated from high school.
18. Which of the following is true about poor populations?
A) There are fewer poor whites than poor blacks.
B) The poor are disproportionately white.
C) The poor are less likely to be children than the elderly.
D) The poor are less likely to have graduated from high school.
19. Which of the following is the group with the highest poverty rate?
A) Blacks in general.
B) Hispanics in general.
C) Children in general.
D) Female-headed households with children.
Chapter 35 – Poverty and Welfare
20. Which of the following racial/ethnic populations make up the greatest numbers of those in
poverty?
A) Whites (non-Hispanic).
B) Blacks (non-Hispanic).
C) Hispanics.
D) Asians.
21. Which of the following groups is under-represented in the poverty statistics relative to their
overall US population?
A) Whites (non -Hispanic).
B) Blacks (non-Hispanic).
C) Hispanics.
22. Which of the following is true?
A) The poverty rate among women is higher than that of men.
B) The poverty rate among female-headed households is greater than among married
households.
C) The number of poor whites is less than the number of poor blacks.
D) The poverty rate among women is higher than that of men and the poverty rate among
female-headed households is greater than among married households.
23. Which of the following is true?
A) The poverty rate among the elderly is greater than the poverty rate among children.
B) The poverty rate among men is greater than the poverty rate among women.
C) The poverty rate among blacks is greater than the poverty rate among whites.
D) The poverty rate among Hispanics is less than the poverty rate among whites.
Chapter 35 – Poverty and Welfare
24. Which of the following is false?
A) The poverty rate among the elderly is greater than the poverty rate among children.
B) The poverty rate among women is greater than the poverty rate among men.
C) The poverty rate among whites is greater than the poverty rate among blacks.
D) The poverty rate among Hispanics is greater than the poverty rate among whites.
25. Which of the following groups has the lowest poverty rate?
A) Whites.
B) The elderly.
C) Children.
D) People with bachelor’s degrees.
26. The poverty rate among female-headed households is around
A) 2%.
B) 11%.
C) 40%.
D) 70%.
27. Since 1970 the poverty rate has
A) decreased steadily and constantly in good times and bad.
B) increased steadily and constantly in good times and bad.
C) been high in good times and low in bad times.
D) been low in good times and high in bad times.
28. The 1960’s “war on poverty” is generally credited with
A) the entirety of the drop in the poverty rate during the decade.
B) none of the drop in the poverty rate during the decade.
C) only a part of the drop in the poverty rate during the decade.
D) increasing the poverty rate during the decade.
29. If the poverty line is set too high, the official poverty rate will be
A) lower than the true level.
B) unaffected by this problem.
C) higher than the true level.
D) negative
Chapter 35 – Poverty and Welfare
30. If the poverty line is set too low, the official poverty rate will be
A) lower than the true level.
B) unaffected by this problem.
C) higher than the true level.
D) negative
31. The fact that the poverty line does not account for day-care costs suggests that it is set too
A) high and the poverty rate is therefore understated.
B) high and the poverty rate is therefore overstated.
C) low and the poverty rate is therefore understated.
D) low and the poverty rate is therefore overstated.
32. Ignoring the issue of whether the CPI overstates the cost of living generally, the fact that the
poverty line is adjusted using the overall CPI to adjust for overall inflation means that if the
costs of necessities rises
A) faster than the overall CPI the poverty line is overstated.
B) faster than the overall CPI the poverty line is understated.
C) slower than the overall CPI the poverty rate is understated.
D) slower than the overall CPI the poverty rate is overstated.
33. Because it costs more to live in cities than it does to live in rural areas the
A) poverty line is set too high in cities and too low in rural areas.
B) poverty line is set too low in cities and too high in rural areas.
C) poverty rate is overstated in cities and understated in rural areas.
D) true poverty rate is higher than the government reports it to be.
34. Because of an increase in the work-force participation rate for women, the availability of
uncompensated child-care (free care by aunts, sisters, and grandmothers) has become less
available to poor women so as a consequence the fact that child-care must now be paid for
suggests that the
A) poverty line should be revised upward.
B) poverty line should be revised downward.
C) poverty gap is overstated.
D) poverty rate is overstated.
Chapter 35 – Poverty and Welfare
35. Because of an increase in the work-force participation rate for women, the availability of
uncompensated child-care (free care by aunts, sisters, and grandmothers) has become less
available to poor women so as a consequence the fact that child-care must now be paid for
suggests that the
A) poverty is not a problem.
B) poverty line should be revised downward.
C) poverty gap is overstated.
D) poverty rate is understated.
36. Which of the following programs are in-kind?
A) AFDC/TANF
B) EITC
C) WIC
D) AFDC/TANF and EITC
37. Which of the following programs are in-cash?
A) AFDC/TANF
B) EITC
C) WIC
D) AFDC/TANF and EITC
38. In-cash transfers differ from in-kind transfers in that
A) the former offers greater control over spending by the poor on inappropriate things.
B) the former is more cost-effective and less bureaucratic.
C) the former is more certain to target children effectively.
D) none of these, the two are identical.
39. Which of the following is targeted narrowly to pregnant women and their infant children?
A) AFDC
B) TANF
C) WIC
D) Food Stamps
Chapter 35 – Poverty and Welfare
40. Which of the following is the most costly program for the poor?
A) Medicaid
B) AFDC/TANF
C) WIC
D) Food stamps
41. The EITC differs from other programs in that
A) it is administered by the states rather than the Federal government.
B) it is administered by the Internal Revenue Service rather than a human services agency.
C) it is part of the Social Security system.
D) it provides actual food.
42. SSI differs from other programs in that
A) it is administered by the states rather than the Federal government.
B) it is administered by the Internal Revenue Service rather than a human services agency.
C) it is part of the Social Security system.
D) it provides actual food.
43. We spend ____ on in-kind transfers and ____ on in-cash transfers to help the poor per year.
A) $100 billion, $91 billion
B) $530 billion, $116 billion
C) $910 billion, $381 billion
D) $1,400 billion, $391 billion
44. The incentives built into nearly all welfare programs
A) encourage work.
B) encourage family planning.
C) encourage marriage.
D) none of the above.
45. The incentives built into nearly all welfare programs
A) encourage work.
B) encourage family planning.
C) encourage marriage.
D) discourage savings.
Chapter 35 – Poverty and Welfare
46. The incentives built into nearly all welfare programs
A) encourage work.
B) encourage family planning.
C) discourage marriage.
D) encourage savings.
47. The incentives built into nearly all welfare programs
A) encourage work.
B) discourage family planning.
C) encourage marriage.
D) encourage savings.
48. The incentives built into nearly all welfare programs
A) discourage work.
B) encourage family planning.
C) encourage marriage.
D) encourage savings.
49. A wealthy person may legally use food stamps and WIC vouchers
A) because the programs are not means tested.
B) because they may have children who are ill.
C) when they are caring for foster children.
D) when they have trouble making ends meet.
50. The 1996 Welfare reform laws had the impact of
A) eliminating poverty.
B) doubling the poverty rate.
C) increasing work by welfare recipients.
D) halving the number of people in poverty.
Chapter 35 – Poverty and Welfare
51. Evidence suggests that the 1996 Welfare reform laws increased work by welfare recipients
through
A) increased use of work requirements only.
B) increased use of work incentives only.
C) increased use of work requirements and incentives.
D) pure coincidence.
52. The economic evidence suggests that the incentives in nearly all welfare programs are
A) so powerful that welfare has unambiguously made problems worse.
B) actually counter to what was thought: the existence of welfare reduces the need for it.
C) mixed; some studies show that welfare makes problems worse but most do not.
D) carefully structured to encourage the highest moral standards among recipients.
53. Which of the following is a goal of a welfare system?
A) To make recipients happy.
B) To reduce the number of children born.
C) To provide an incentive to leave the system.
D) To stimulate economic growth.
54. Which of the following is a goal of a welfare system?
A) To provide an adequate standard of living.
B) To reduce the number of children born.
C) To make recipients happy.
D) None of the above.
55. Which of the following is a goal of a welfare system?
A) To make recipients happy.
B) To maintain political support by not being overly expensive.
C) To reduce the number of children born.
D) None of the above.
Chapter 35 – Poverty and Welfare
56. Most of the reduction in poverty rates since World War II occurred as a result of the
A) 1960s War On Poverty.
B) 1996 welfare reforms.
C) end of “welfare as we know it”.
D) 1960s War On Poverty.
57. Some economists believe that poverty can be good for the economy, since
A) the desire to avoid poverty provides a powerful incentive to “work hard and play by the
rules”.
B) countries with high rates of economic growth since the 1980s tend to have less income
inequality.
C) poverty seems to encourage gambling.
D) poverty discourages child-bearing, leaving women with more time to work.
58. The fraction of families living in poverty that are headed by single mothers of children under
age 18 is
A) 22%.
B) 36%.
C) 45%.
D) 68%.
59. In 2010, the poverty line was
A) $9,373 for one person, and $13,500 for a family of four.
B) $11,369 for one person, and $22,162 for a family of four.
C) $12,013 for one person, and $15,769 for a family of four.
D) $15,769 for one person, and $32,463 for a family of four.
60. In 2010, the ethnic group experiencing the highest poverty rate was
A) white, non-Hispanic.
B) Hispanic.
C) black, non-Hispanic.
D) another race.
Chapter 35 – Poverty and Welfare
61. Economist Timothy Smeeding reported that income inequality
A) was higher in the U.S. than in any of the European countries studied.
B) was lower in the U.S. than in any of the European countries studied.
C) was roughly the same in both the U.S. and in the European countries studied.
D) seems to increase whenever it is studied scientifically.
62. Economist Timothy Smeeding reported that appropriately-adjusted poverty rates were
A) lower in the U.S. than in eight of the nine European countries studied.
B) higher in the U.S. than in eight of the nine European countries studied.
C) roughly the same in both the U.S. and in eight of the nine European countries studied.
D) higher in eight of the nine European countries studied than anywhere in sub-Saharan
Africa.
63. Through its anti-poverty programs, the U.S. currently spends $546 billion attempting to
A) achieve European standards of bureaucratic efficiency.
B) increase the median educational attainment of welfare recipients by two years.
C) eliminate a “poverty gap” of only $79 billion.
D) “end welfare as we know it”.
64. After accounting for taxes and various welfare programs, economist Timothy Smeeding
estimates that the average European country’s anti-poverty programs reduce their poverty by
60% while
A) U.S. anti-poverty programs reduce poverty by only 26%.
B) U.S. anti-poverty programs reduce poverty by more than 83%.
C) U.S. anti-poverty programs actually increase poverty by 6%.
D) U.S. anti-poverty programs have virtually eliminated poverty among sociologists.
65. Since the year 1959, the poverty rate has
A) increased very slightly.
B) increased significantly.
C) remained almost unchanged.
D) decreased significantly.
Chapter 35 – Poverty and Welfare
66. Since the year 1969, the poverty rate has
A) increased very slightly.
B) increased significantly.
C) remained almost unchanged.
D) decreased significantly.
67. Children under 18 are ___ percent of the general population, but ____ percent of those who
are poor.
A) 38.2; 52.3
B) 24.6; 35.6
C) 15.2; 43.8
D) 15.2; 52.3
68. The poverty rate among children under age 18 is approximately
A) 20 percent.
B) 24 percent.
C) 36 percent.
D) 45 percent.
69. Because the AFDC program reduced benefits by almost $1 for every $1 earned, a single
parent of two small children requiring daycare would have to
A) resort to crime just to make ends meet.
B) work fulltime earning at least one-half the minimum wage to be better off working than
on welfare.
C) work fulltime earning at least the minimum wage to be better off working than on
welfare.
D) work fulltime earning at least twice the minimum wage to be better off working than on
welfare.
True/False
70. The three goals of all welfare programs can be met simultaneously in the U.S.
A) True
B) False