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Questions and Answers
What is defined as the minimum income level that covers basic food, shelter, transportation, and medical care?
What is defined as the minimum income level that covers basic food, shelter, transportation, and medical care?
Which group has the LOWEST poverty rate in the United States?
Which group has the LOWEST poverty rate in the United States?
How common is it for Americans to experience a spell of poverty during their lifetime?
How common is it for Americans to experience a spell of poverty during their lifetime?
What is social insurance primarily focused on?
What is social insurance primarily focused on?
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Which statement is NOT correct regarding poverty in the United States?
Which statement is NOT correct regarding poverty in the United States?
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Government programs that are 'means-tested' require what?
Government programs that are 'means-tested' require what?
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Which program is NOT a means-tested social safety net program in the United States?
Which program is NOT a means-tested social safety net program in the United States?
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What percentage of people who escape poverty are likely to return within five years?
What percentage of people who escape poverty are likely to return within five years?
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What was the approximate poverty line for a household with two people in 2023?
What was the approximate poverty line for a household with two people in 2023?
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What percentage of the U.S. population lived in poverty in 2023?
What percentage of the U.S. population lived in poverty in 2023?
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Since World War II, how has the distribution of income in the United States changed?
Since World War II, how has the distribution of income in the United States changed?
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Which of the following U.S. programs offers a means-tested, in-kind transfer?
Which of the following U.S. programs offers a means-tested, in-kind transfer?
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Compared to many other developed nations, what is notable about the poverty rate in the United States?
Compared to many other developed nations, what is notable about the poverty rate in the United States?
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Inheriting a house allows you to live in it. What is the result on your wealth and income?
Inheriting a house allows you to live in it. What is the result on your wealth and income?
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Why were you no longer eligible for certain assistance programs after starting a job?
Why were you no longer eligible for certain assistance programs after starting a job?
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What concept is illustrated by a student's reduced effort in class due to a grading system that equalizes grades for all students?
What concept is illustrated by a student's reduced effort in class due to a grading system that equalizes grades for all students?
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Which aspect of fairness is emphasized when considering Frances's successful career compared to Francis's less successful one?
Which aspect of fairness is emphasized when considering Frances's successful career compared to Francis's less successful one?
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How would you explain the difference between Medicaid and Medicare?
How would you explain the difference between Medicaid and Medicare?
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In the parable of the vineyard workers, what type of fairness do you imply by believing the vineyard owner was fair in paying all workers the same?
In the parable of the vineyard workers, what type of fairness do you imply by believing the vineyard owner was fair in paying all workers the same?
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What effect does understanding permanent income have on Myrda's finances?
What effect does understanding permanent income have on Myrda's finances?
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Why do you believe the Fiscal Challenge competition will be fair?
Why do you believe the Fiscal Challenge competition will be fair?
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Which statement is NOT true about permanent income as a measure of living standards?
Which statement is NOT true about permanent income as a measure of living standards?
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What is a common misconception about Social Security according to your friend's rationale?
What is a common misconception about Social Security according to your friend's rationale?
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What role does disability insurance play in your cousin Pat's situation after an accident?
What role does disability insurance play in your cousin Pat's situation after an accident?
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How can the fairness of the outcomes in the vineyard workers' parable be perceived?
How can the fairness of the outcomes in the vineyard workers' parable be perceived?
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What happens to Mryda's consumption usually when faced with short-term unemployment?
What happens to Mryda's consumption usually when faced with short-term unemployment?
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What would be a logical result of inheriting an asset like a house?
What would be a logical result of inheriting an asset like a house?
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What underlying principle can be derived from the Fiscal Challenge's rule of impartiality?
What underlying principle can be derived from the Fiscal Challenge's rule of impartiality?
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What might be a misconception regarding the relationship between higher taxes and Pat's ability to manage after the accident?
What might be a misconception regarding the relationship between higher taxes and Pat's ability to manage after the accident?
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What is meant by permanent income?
What is meant by permanent income?
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In comparison to other developed countries, how do the chances of falling into poverty in the United States rank?
In comparison to other developed countries, how do the chances of falling into poverty in the United States rank?
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As a struggling artist moving to a Caribbean island changes your income status from below the poverty line to the fourth income quintile, this reflects a change in which type of poverty?
As a struggling artist moving to a Caribbean island changes your income status from below the poverty line to the fourth income quintile, this reflects a change in which type of poverty?
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What division of population is typically used to analyze income inequality, and what are these groups referred to as?
What division of population is typically used to analyze income inequality, and what are these groups referred to as?
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What percentage of total income is earned by the top quintile in the provided income distribution?
What percentage of total income is earned by the top quintile in the provided income distribution?
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From 1970 through 2014, how did the share of income earned by the top quintile change compared to the share earned by the bottom quintile?
From 1970 through 2014, how did the share of income earned by the top quintile change compared to the share earned by the bottom quintile?
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If a household earns $70,000, what percentage of total income does this household represent in the population?
If a household earns $70,000, what percentage of total income does this household represent in the population?
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Why is average lifetime income considered a better predictor of a person's current living standard than current income?
Why is average lifetime income considered a better predictor of a person's current living standard than current income?
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How do people's beliefs about wealth distribution in the United States differ from the actual distribution?
How do people's beliefs about wealth distribution in the United States differ from the actual distribution?
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How tend to differ consumer spending relative to income?
How tend to differ consumer spending relative to income?
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What trend has the U.S. poverty rate exhibited over the past 40 years?
What trend has the U.S. poverty rate exhibited over the past 40 years?
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What defines the poverty line?
What defines the poverty line?
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What does the poverty rate represent?
What does the poverty rate represent?
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What is the basis for the income level that defines the poverty line in the U.S.?
What is the basis for the income level that defines the poverty line in the U.S.?
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Which standard measures relative poverty?
Which standard measures relative poverty?
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Study Notes
Practice Final Exam - Key Concepts
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Grading System Tradeoff: The professor's policy of averaging class points for grades creates a trade-off between efficiency (everyone gets the same grade) and equality (effort is not rewarded in a comparative way).
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Poverty Types: The exam distinguishes between absolute and relative poverty. Absolute poverty defines a minimum level of income, while relative poverty compares income to the broader population's standard of living.
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Middle-Class Twins: The exam details two twins, one succeeding, and another failing to reach the top quintile after having similar opportunities.
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Equity vs Fairness: The question of fairness in the vineyard workers parable (Matthew 20:1-16) focuses on outcomes, opportunities, process, and redistribution in employment.
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Fiscal Challenge: The competition format of the economics club's Fiscal Challenge is designed to prioritize process fairness to ensure opportunities, outcomes, and process are fairly measured.
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Social Insurance Program: The accident of your cousin, Pat illustrates a social insurance program, through disability insurance, mitigating the impact of the loss of income or job due to inability to work.
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Wealth vs Income: The inheritance of a beach house increases wealth, while income is generated by rental.
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Social Safety Net: The Supplemental Nutrition Assistance Program (SNAP)and housing assistance are means-tested. This means eligibility depends on income requirements.
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Retirement Benefits: The example illustrates that Social Security is designed to ensure a decent standard of living in retirement, often linked to prior earned income.
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Difference Between Medicaid and Medicare: Medicaid is a means-tested, government funded healthcare program providing coverage for low-income individuals. Medicare, another government funded program, offers health insurance to older adults.
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Permanent Income: A concept mentioned as an indicator of financial security, rather than fluctuating annual income.
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Poverty and Distribution: Questions regarding the poverty line and percentages of populations living in poverty are relevant to understand relative and absolute measures in the United States.
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Income Inequality: Discussion points highlight that income disparities have changed over time based on the way incomes are distributed amongst different groups of individuals in the U.S.
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Means-Tested vs Non-means-Tested: Distinctions made between programs requiring income verification (means-tested) and programs available to all citizens (non-means-tested) for certain benefits.
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Poverty, Social Inequality, and Distribution: The questions discuss various aspects of poverty including poverty rates, the means-tested programs and how to measure the level of poverty.
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Economic Policies Several questions pertain to different types of economic policies.
Data Interpretation (Specific to Question 16 & 17)
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Top Quintile Income: The top quintile earns 43.8% of total income in the example dataset.
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Bottom Quintile Income: In the example, the bottom quintile earns 1.3% of total income.
Additional Concepts
- Lifetime Income vs. Current Income: Lifetime income is argued to be a more practical metric for measuring overall financial well-being compared to annual income.
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Description
This quiz covers key concepts from the final economics exam, exploring topics such as grading policies, types of poverty, equity versus fairness, and fiscal challenges in competitions. Participants will analyze trade-offs in grading systems and understand different poverty definitions while reflecting on fairness in economic opportunities.
