Economics and Social Equity Final Exam - Fall 2024

The minimum income level that the government considers necessary for families to meet their basic needs. It is used to determine eligibility for various welfare programs.

The percentage of the US population living below the poverty line. It is a measure of economic well-being and inequality.

The unequal distribution of income within a society. It reflects the gap between the richest and poorest individuals.

Social insurance programs are funded through payroll taxes and are generally available to all citizens regardless of their income. Means-tested programs provide benefits only to individuals or families deemed eligible based on their income and assets.

Non-cash benefits provided by government programs, such as food stamps, housing assistance, or healthcare.

A situation where maximizing one often comes at the cost of the other. For example, giving everyone the same grade might be equal, but it might not be efficient in recognizing individual effort.

Focusing on the fairness of the rules and opportunities provided, rather than the final outcomes.

Focusing on the fairness of the final results, even if the processes leading to them were different.

Focusing on the fairness of everyone having equal chances to succeed, regardless of background or circumstances.

Programs designed to protect individuals from risks like unemployment, disability, or illness, funded through contributions.

A metaphor for government programs where some of the benefits intended for recipients are lost due to administrative costs or inefficiencies.

Expenses associated with managing and delivering government programs, such as salaries, equipment, and paperwork.

Government programs designed to help individuals and families facing economic hardship. These programs provide financial assistance, healthcare, housing, and other support services to those in need.

A government program that transfers income from wealthier individuals or households to those with lower incomes, aiming to reduce income inequality.

A government program that provides goods or services directly to individuals or households instead of cash, often targeted at low-income families.

A tax system where individuals with higher incomes pay a larger proportion of their income in taxes than those with lower incomes. This aims to redistribute wealth more evenly.

A tax system where individuals with lower incomes end up paying a higher proportion of their income in taxes than those with higher incomes. This can exacerbate income inequality.

Factors contributing to individuals and families living below the poverty line, such as unemployment, lack of education, discrimination, and limited access to resources.

Wealth refers to the total value of assets owned, while income represents earnings from work or investments. A house is considered an asset, so inheriting it increases wealth but not income.

These programs provide assistance based on income and assets. If your income increases, you may no longer qualify for programs like SNAP or housing assistance.

Social Security benefits are tied to your earnings during your working years. Higher earnings lead to higher benefits in retirement.

Medicaid is a means-tested health insurance program for low-income individuals, while Medicare is a health insurance program for those over 65 years old.

Permanent income represents a person's average income over a long period, taking into account both temporary fluctuations and long-term earning potential.

Permanent income is a better indicator of living standards than annual income because it accounts for long-term earning potential and smooths out temporary fluctuations in income.

Economists believe that average lifetime income is a better indicator of a person's current living standard than current income because it accounts for factors such as savings, borrowing, and wealth accumulation over a person's lifetime. This allows individuals to smooth their consumption patterns and potentially enjoy a higher standard of living than their current income might suggest.

People generally believe that the distribution of wealth in the United States is more unequal than it actually is. This perception suggests a gap between public understanding and the reality of wealth distribution.

Differences in consumer spending tend to vary more than differences in income. This implies that people with higher incomes tend to have a wider range of spending patterns compared to those with lower incomes.

Over the past 40 years, the U.S. poverty rate has had a relatively stable trend. This means that the percentage of people living below the poverty line hasn't significantly increased or decreased over this period.

The poverty line is an income level set by the government. If a family's income falls below this line, they are considered to be living in poverty. This line is based on the cost of a basic food plan multiplied by three, adjusted for inflation.

The poverty rate measures the percentage of the population living below the poverty line. It quantifies the proportion of people whose household income falls below the government-defined threshold for poverty.

The U.S. government determines the poverty line based on a low-cost food plan multiplied by three. This value is updated annually to account for inflation. It represents the minimum estimated income needed for a family to meet their basic needs.

Relative poverty refers to a standard of living below the median income of a particular society. It signifies being poor compared to the living standards of others in the same community or nation.

In the US, children, single mothers, and people of color are more likely to be in poverty.

Periods of time when individuals or families live below the poverty line. They can be short, lasting a few months, or long-term, lasting several years.

A state of persistent poverty, where individuals or families remain below the poverty line for an extended period, often for several years.

A pattern where individuals or families experience multiple spells of poverty over their lifetime, even after escaping it.