Question 1

The Social Security program tends to

Accepted Answer

A)  Increase work incentives for both older and younger workers.
B)  Increase work incentives for older workers but not younger workers.
C)  Decrease work incentives for both older and younger workers.
D)  Decrease work incentives for older workers but not younger workers.E) A) and C)
F) A) and B)

Question 2

Almost every U.S.household receives some form of income transfer payments.

Accepted Answer

A) True 
 B)False

Question 3

A transfer program that is event-triggered for those who are eligible for benefits is known as

Accepted Answer

A)  An in-kind transfer.
B)  A cash transfer.
C)  Welfare.
D)  Social insurance.E) B) and D)
F) All of the above

Question 4

Large in-kind benefits tend to increase the incentive to seek employment.

Accepted Answer

A) True 
 B)False

Question 5

Social Security is a welfare program.

Accepted Answer

A) True 
 B)False

Question 6

Transfer payments include all of the following except

Accepted Answer

A)  Government-subsidized loans for students.
B)  Federal crop assistance for farmers.
C)  A church-run thrift store for the poor.
D)  Social Security benefits for retirees.E) C) and D)
F) A) and B)

Question 7

The creation of a retirement program, such as the Social Security program, will cause an increase in the wage rate, ceteris paribus.

Accepted Answer

A) True 
 B)False

Question 8

Use the following formula to answer the indicated question: Welfare benefit = Maximum benefit - Wages A welfare system based on the welfare formula given

Accepted Answer

A)  Will increase the risk of moral hazard.
B)  Will increase work incentives.
C)  Will increase the number of people eligible for welfare.
D)  Has an effective marginal tax rate of 50 percent for welfare recipients.E) All of the above
F) B) and C)

Question 9

Use the following formula to answer the indicated question: Benefit amount = Maximum award - 0.6 (Wages in excess of ceiling)  Charles is retired and earns $10,000 per year working part-time.He is entitled to a maximum Social Security retirement benefit of $14,000.Social Security regulations allow him to earn $8,000 and still get maximum benefits.If he increases the number of hours he works and thus increases his earnings to $20,000, his total income will increase by

Accepted Answer

A)  $4,000.
B)  $6,000.
C)  $10,000.
D)  $28,000.E) A) and D)
F) A) and C)

Question 10

The Social Security payments received by retired persons are an in-kind transfer payment.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following student aid programs is likely to have the highest target efficiency?

Accepted Answer

A)  Direct payment of tuition to the university.
B)  Direct cash payments to the student.
C)  Low-interest loans.
D)  Job opportunities for students.E) A) and B)
F) All of the above

Question 12

If welfare benefits equal the poverty gap for each household in poverty, then the

Accepted Answer

A)  Effective marginal tax rate for welfare recipients is 100 percent.
B)  Poor have a strong incentive to begin working.
C)  The poverty gap will become greater.
D)  Production possibilities curve will shift to the right.E) None of the above
F) B) and C)

Question 13

The existence of income transfer programs is likely to

Accepted Answer

A)  Result in recipients having fewer children.
B)  Change the distribution of income but not the mix of output.
C)  Decrease the supply of labor.
D)  Discourage people from overusing health care services.E) B) and D)
F) C) and D)

Question 14

Social insurance programs are

Accepted Answer

A)  Event-conditional.
B)  Means-tested.
C)  Available only to those at least 65 years old.
D)  Considered a welfare program.E) A) and D)
F) None of the above

Question 15

The existence of transfer programs implies that

Accepted Answer

A)  Government failure has occurred.
B)  Market failure has occurred.
C)  Technical efficiency exists.
D)  Allocative efficiency exists.E) B) and C)
F) C) and D)

Question 16

The creation of the Social Security program had no impact on the labor force participation rate because people are not interested in working past the age of 65.

Accepted Answer

A) True 
 B)False

Question 17

An assistance program that guarantees a minimum income, regardless of the family's earned income, has a

Accepted Answer

A)  Marginal tax rate of zero percent.
B)  Breakeven income level equal to the need standard.
C)  Zero disregard.
D)  High tax elasticity of labor supply.E) B) and C)
F) A) and B)

Question 18

Welfare costs can be reduced by

Accepted Answer

A)  Decreasing the breakeven level of income.
B)  Reducing the marginal tax rate.
C)  Increasing earnings disregards.
D)  Decreasing the tax elasticity of labor supply.E) B) and D)
F) None of the above

Question 19

Lower marginal tax rates for welfare programs will reduce the number of people on welfare.

Accepted Answer

A) True 
 B)False

Question 20

A zero marginal tax rate in welfare programs will make everyone eligible for welfare benefits.

Accepted Answer

A) True 
 B)False

Exam 20: Transfer Payments: Welfare and Social Security

The Social Security program tends to

Correct Answer
verified

Social Security is a welfare program.

Correct Answer
verified

If welfare benefits equal the poverty gap for each household in poverty, then the

Correct Answer
verified

Transfer payments include all of the following except

Correct Answer
verified

A zero marginal tax rate in welfare programs will make everyone eligible for welfare benefits.

Correct Answer
verified

A transfer program that is event-triggered for those who are eligible for benefits is known as

Correct Answer
verified

The Social Security payments received by retired persons are an in-kind transfer payment.

Correct Answer
verified

The creation of the Social Security program had no impact on the labor force participation rate because people are not interested in working past the age of 65.

Correct Answer
verified

Welfare costs can be reduced by

Correct Answer
verified

The existence of transfer programs implies that

Correct Answer
verified

Use the following formula to answer the indicated question: Welfare benefit = Maximum benefit - Wages A welfare system based on the welfare formula given

Correct Answer
verified

The creation of a retirement program, such as the Social Security program, will cause an increase in the wage rate, ceteris paribus.

Correct Answer
verified

An assistance program that guarantees a minimum income, regardless of the family's earned income, has a

Correct Answer
verified

Correct Answer
verified

Lower marginal tax rates for welfare programs will reduce the number of people on welfare.

Correct Answer
verified

Which of the following student aid programs is likely to have the highest target efficiency?

Correct Answer
verified

Social insurance programs are

Correct Answer
verified

Large in-kind benefits tend to increase the incentive to seek employment.

Correct Answer
verified

The existence of income transfer programs is likely to

Correct Answer
verified

Almost every U.S.household receives some form of income transfer payments.

Correct Answer
verified

Exam 20: Transfer Payments: Welfare and Social Security

The Social Security program tends to

Correct AnswerverifiedShow Answer

Social Security is a welfare program.

Correct AnswerverifiedShow Answer

If welfare benefits equal the poverty gap for each household in poverty, then the

Correct AnswerverifiedShow Answer

Transfer payments include all of the following except

Correct AnswerverifiedShow Answer

A zero marginal tax rate in welfare programs will make everyone eligible for welfare benefits.

Correct AnswerverifiedShow Answer

A transfer program that is event-triggered for those who are eligible for benefits is known as

Correct AnswerverifiedShow Answer

The Social Security payments received by retired persons are an in-kind transfer payment.

Correct AnswerverifiedShow Answer

The creation of the Social Security program had no impact on the labor force participation rate because people are not interested in working past the age of 65.

Correct AnswerverifiedShow Answer

Welfare costs can be reduced by

Correct AnswerverifiedShow Answer

The existence of transfer programs implies that

Correct AnswerverifiedShow Answer

Use the following formula to answer the indicated question: Welfare benefit = Maximum benefit - Wages A welfare system based on the welfare formula given

Correct AnswerverifiedShow Answer

The creation of a retirement program, such as the Social Security program, will cause an increase in the wage rate, ceteris paribus.

Correct AnswerverifiedShow Answer

An assistance program that guarantees a minimum income, regardless of the family's earned income, has a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Lower marginal tax rates for welfare programs will reduce the number of people on welfare.

Correct AnswerverifiedShow Answer

Which of the following student aid programs is likely to have the highest target efficiency?

Correct AnswerverifiedShow Answer

Social insurance programs are

Correct AnswerverifiedShow Answer

Large in-kind benefits tend to increase the incentive to seek employment.

Correct AnswerverifiedShow Answer

The existence of income transfer programs is likely to

Correct AnswerverifiedShow Answer

Almost every U.S.household receives some form of income transfer payments.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified