quiz 4 pt2

Question 1

a person’s earnings depend on the

Answer 1

supply & demand for that person’s labor.

Question 2

as economic growth pushes the entire income distribution UPWARD, more families r pushed _________ the poverty line because the poverty line is an ______ rather than a ___________

Answer 2

Above
absolute
relative standard

(less poverty)

Question 3

problems in measuring inequality
-data on income distribution & poverty rate r given an incomplete picture of inequality in living standards… because of (3)

Answer 3

in-kind transfers

the economic life cycle

transitory versus permanent income

Question 4

in-kind transfers

Answer 4

transfers to the poor in form of goods & services rather than cash. (food stamps)

Question 5

measurements of distribution of income & poverty rate are based on

Answer 5

families’ money income

Question 6

LIFE cycle

1 exception

Answer 6

the regular pattern of income variation over a person’s life

-young worker= low income
-older & mature= higher income

exception- born into wealth

Question 7

transitory vs permanent income (2)

Answer 7

acts of nature that reduces income

temporary layoffs due to sickness or economic conditions

Question 8

permanent income EXCLUDES

Answer 8

transitory changes in income

Question 9

economic mobility

Answer 9

the movement of ppl among the income classes (from poor to rich)

Question 10

sources of economic mobility (3)

Answer 10

good/ bad luck

hard work/ laziness

persistence of economic success from generation to generation