Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 28, Problem 12CQ
To determine
Evaluation of the statement regarding means-tested transfer payment.
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Many government assistance programs phase-out as recipients' income increases. The government can reduce the poverty trap by having this phase-out happen
Question 25 options:
more slowly.
more quickly.
completely once the recipient earns any income at all.
there is no connection between phase-out rate and the poverty trap.
What makes the Earned Income Tax Credit (EITC) different from other poverty-fighting programs?
The amount of the credit is doubled if the head of household is attending college.
The tax credit is phased out gradually, rather than at a specific income cutoff point.
The amount of the credit is not determined by the number of dependent children in the household.
The EITC doesn't require the recipient to pay a minimum amount of income tax in order to receive the credit.
It creates less of an incentive to work than other programs.
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.
After the start of the War on Poverty, the downward trend in the poverty rate halted.
In 2018, the adjusted poverty rate was only 4 percentage points lower than the official rate in 1970.
The poverty rate declined substantially in the period after the War on Poverty, but not in the period before the start of the War on
Poverty.
The adjusted poverty rate has declined rapidly and is now less than half of the official poverty rate.
Chapter 28 Solutions
Economics: Private and Public Choice (MindTap Course List)
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Similar questions
- In social welfare programs, there is no way to change either the benefit reduction rate or the benefit guarantee to simultaneously achieve all three goals of encouraging work, redistributing more income and lowering costs. What is this dilemma called?arrow_forwardWhich of the following are true regarding the measurement of poverty? The poverty rate is the percentage of households whose earnings fall below the poverty line. The measurement of the poverty rate takes into account the effect of in-kind transfers. The measurement of the poverty rate does not take into account whether a households loss of income is transitory or permanent. The poverty line is an income amount below which a family is deemed to be poor.arrow_forwardPoverty is measured by the number of people who fall below a certain level of income—called the poverty line—that defines the income one needs for a basic standard of living. The official definition of the poverty line traces back to Group of answer choices A)The Great Depression B)Mollie Orshansky, whose idea was to define a poverty line based on the cost of a healthy diet. C)1953 and the ability to pay for housing and food. D)The 1965 cost of providing food, housing, and transportation.arrow_forward
- As income transfer programs accompanying the War on Poverty increased beginning in the latter half of the 1960s, what happened to the poverty ratearrow_forwardMany economists believe that a more effective way to supplement the income of the poor is through a negative income tax. Under this scheme, everyone reports his or her income to the government; individuals and families earning a higher income will pay a tax based on that income, while low-income individuals and families receive a subsidy, or negative tax. Assume that the only qualification required to receive a tax credit is low income.arrow_forwardPoverty and Income Distribution: End of Chapter Problems 4. Currently, the poverty threshold for a family of four is just over $25,000 a year. Among the given factors that affect poverty, indicate those that the official poverty threshold accounts for and those that it does not. Accounted for by the official poverty threshold Not accounted for by the official poverty threshold Answer Bank Differences in tax rates between different locales Inflation The cost of essential living expenses Changes in noncash benefits Geographical differences in the cost of livingarrow_forward
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