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Home / Questions / The main attractive feature of a negative income tax program is

The main attractive feature of a negative income tax program is

The main attractive feature of a negative income tax program is

a.it is politically clean and simple

b.it keeps the IRS out of the picture

c.it avoids cash payments to the poor

d.it is totally financed out of the incomes of the poor creating for them a sense of
individual responsibility

e.it only subsidizes the unemployed

62.              Critics of the negative income tax program point to the fact that

a.it is based on the assumption that the real problem of the poor is their low levels of
income

b.it is extremely difficult to administer

c.it does not create incentives to work

d.it does not create income equality

e.it is concerned only with the unemployed poor

63.              Suppose an economy of five people has a national income of $100,000, and each
                            individual earns $20,000. The Gini coefficient for this economy is

a.one

b.zero

c.between 1.0 and 0.5

d.between 0 and 0.5

e.not enough information is given

64.              Reasons for greater income inequality in less-developed countries than in developed
                            economies are all the following except

a.marginal revenue product of labor is low

b.marginal revenue product of capital

c.low levels of education are attained

d.the economy is in the early stages of transforming from predominantly agricultural
to industrial production

e.societal preference for income inequality

65.              Marxists believe that poverty and income inequality arise fundamentally from

a.labor market discrimination

b.unequal distribution of skills in the population

c.unequal distribution of property

d.too high a rate of population growth

e.unequal access to education

66.              Price ceilings and minimum wages may increase poverty in the long run because they
                            tend to

a.decrease the incentive to work among the poor

b.increase the level of saving among the rich

c.increase productivity of labor among the rich and poor

d.promote investment among the rich

e.reduce the distortions in the price system

67.              If the government increased the income tax on the rich and increased transfer payments to
                            the poor, the most likely result would be

a.to increase investment in the economy

b.the eradication of poverty

c.a rise in the Gini coefficient

d.an increase in the economy’s rate of economic growth

e.a decline in the economy’s rate of economic growth

68.              In a world where people would have no prior information about where they are in an
                            income distribution, given the choice, Rawls argues that they would prefer

a.an income distribution that is relatively equal

b.that everyone has the same work opportunities and then let incomes be what the
market generates

c.to rely on their abilities so accept high levels of income inequality

d.that private property be transformed to government property to safeguard their
incomes

e.less economic assistance to the poor because it distorts the price system

69.              In contrast to other antipoverty programs, a negative income tax

a.provides incentives to work

b.provides more assistance to children

c.assists the unemployed

d.provides direct in-kind transfers to the most needed

e.recognizes the existence of a culture of poverty

70.              The distribution of wealth is more unequal than the distribution of income because wealth
                            reflects

a.persistent wage differentials between people of different abilities

b.physical assets as opposed to financial assets

c.unequal distribution of talents in the population

d.unequal access to education

e.the distribution of lifetime accumulated assets

Dec 12 2019 View more View Less

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