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Multiple Choice Quiz
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1
The total receipts or cash earned by a person or household during a given time period is called:
A)personal income
B)wealth
C)disposable personal income
D)none of the above.
2
Disposable personal income is:
A)attainable only in the absence of externalities.
B)wealth minus taxes.
C)personal income minus taxes.
D)personal income minus wealth.
3
Which of the following consists of the dollar value of financial and tangible assets, minus the amount of money owed to banks and other creditors?
A)disposable personal income
B)marginal income
C)wealth
D)none of the above
4
The Lorenz curve:
A)shows the difference between the supply and demand curves at all prices.
B)shows the levels of income and wealth inequality in an economy.
C)shows the level of imports and exports in an economy.
D)none of the above.
5
Income inequality is highest in which of the following countries:
A)Sweden
B)Great Britain
C)United States
D)Brazil
6
An economy in which government overrides market forces to protect individuals and to guarantee citizens a minimum standard of living is called a:
A)subsistence state.
B)social state.
C)communist state.
D)welfare state.
7
Which of the following is a serious problem with the current welfare state of the United States?
A)Poverty is a southern problem, so federal support is unnecessary.
B)Eligibility is easy to check, so the roles of people employed by the welfare program are too large.
C)The marginal tax rates on low-income families are very high when loss of benefits is considered.
D)All of the above
8
Which one of the following professions is most likely to have the smallest degree of income inequality?
A)Lawyers
B)Plastic Surgeons
C)Hockey players
D)Army officers
9
Income differentials within a country can be decreased by:
A)labor and capital mobility.
B)technological change in an import competing industry.
C)uniform growth in population.
D)trade barriers between areas.
10
When the Lorenz curve more closely approximates the 45 degree line, income is being:
A)enlarged for nearly every economic class.
B)distributed more unequally.
C)taxed more heavily to pay international debts.
D)distributed more equally.







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