CONNECT F/MICROECONOMICS
21st Edition
ISBN: 2810022151240
Author: McConnell
Publisher: MCG
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Question
Chapter 23, Problem 3RQ
To determine
Which of the statements are true about the Income inequality is true and which are false.
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Students have asked these similar questions
Which would be evidence of an increase in income inequality over time in the United
States?
O a decrease in the percentage of total personal income received by the highest quintile
O an increase in the percentage of total personal income received by the highest quintile
O an increase in the percentage of total personal income received by the four lowest quintiles
O an increase in the percentage of total personal income received by the lowest quintile
The government announces programs designed to reduce the share of income going to the top quintile from 60% to 20%.
You predict that the most likely result is that:
O mean household income will fall, because the highest income earners will earn less and work less.
median household income will rise, because some of the 40% of redistributed income will be transferred to the third
quintile.
after redistribution, each quintile will receive 20% of total wealth.
O the lowest quintile will receive the 40% taken from the top quintile and switch places.
As income transfer programs accompanying the War on Poverty increased beginning in the latter half of the 1960s, what happened to poverty in the
United States? Check all that apply.
O The adjusted poverty rate has declined rapidly and is now less than half of the official poverty rate.
O The poverty rate declined substantially in the period before the War on Poverty, but not in the period after the start of the War on
Poverty.
O In 2018, the adjusted poverty rate was only 4 percentage points lower than the official rate in 1970.
O The War on Poverty has been largely ineffective in reducing the rate of poverty in the United States.
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Similar questions
- Completed 15 out of 20 Submit All Question 9 of 20 If the poverty guideline for a family of four is $25,750, what is the most that a household can earn to be considered "near- poor"? O $19,312.50 O $12,875 O $32,187.50 O $25,750arrow_forwardWealth, earnings, and disposable income are just three of several ways of looking at inequality. Imagine a household that earns $80,000 per year from labor. In that year, it also receives an income of $3,000 from investments, pays $12,000 in tax, and receives $7,000 in transfers from the state. Which of the following is its market income and its disposable income? O $83,000; $71,000. O $83,000 $78,000. O $80,000; $68,000. O $80,000; $75,000. Jarrow_forward4. What is the optimal income distribution between two citizens under these three assumptions: -The Social Welfare Function is Utilitarian. - The total income is fixed. - The two citizens have the same individual utility function, which exhibits decreasing but positive marginal utility of income.arrow_forward
- 19arrow_forwardIf the tax code exempts the first $20,000 of income from taxation and then taxes 25 percent of all income above that level, then a person who earns percent and a marginal tax rate of $50,000 has an average tax rate of percent. O 15, 25 O 25, 15 O 25, 30 O 30, 25arrow_forward30 Premium (high income) EQ 2 Premium (low income) EQ 1 50 55 100 High income households in A In this figure, how many stable AND integrated equilibrium points are shown? O 3 O 2 Rent gap ($)arrow_forward
- Suppose George made $20,000 last year and that he lives in the country of Harmony. The way Harmony levies income taxes, all citizens must pay 10 percent in taxes on their first $10,000 in earnings and then 50 percent in taxes on anything else they might earn. Given that George earned $20,000 last year, his marginal tax rate on the last dollar he earns will be rate for his entire income will be and his average tax O 10 percent; 50 percent O 50 percent; less than 50 percent O 10 percent; less than 50 percent O 50 percent; 50 percentarrow_forwardSubject; Ecarrow_forwardKathy works full time during the day as an economist and faces a 90 percent marginal tax rate. If Kathy were to get an offer to work a second job in the evenings doing consulting work for a local business for $10,000 per year, how much of this additional income would she be able to keep as net pay after taxes? O $1,000 O $4,000 O $6,000 O $10,000arrow_forward
- Consider the following table that gives the monthly per capita consumption expenditure of 10 households with poverty line given as $500 per month. Poverty Gap is %. Monthly per capita consumption expenditure (in $) of 10 households 5 400 300 1000 2500 4 9 400 950 2 3 6 7 8 10 Country A 900 1200 505 100 O a 40 O b. 13 O c. 27 O d. 16arrow_forward35arrow_forwardWhich of the following statements is most inaccurate? O a. Redistribution policies bring about a Pareto improvement in the economy. b. Technology, biology, economic institutions, and people's preferences are all important determinants of economic outcomes. O c. Substantive judgement of fairness involves the evaluation of the final outcome such as freedom or happiness. O d. Procedural judgement of fairness involves the evaluation of the rules and institutions that brought about the final outcome. e. Inequality does not necessarily mean injustice.arrow_forward
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