Moving income from people with higher incomes to people with lower incomes through taxes and transfer programs is known by the economic term redistribution.
Missing Word
redistribution
Redistribution moves income from higher-income to lower-income people, as when taxes on higher earners help fund programs such as SNAP and Medicaid.
Category: Reducing Inequality
Question 2
Having an income below the level needed for a basic standard of living is the condition economists call poverty.
Missing Word
poverty
Poverty is defined by income falling short of a basic standard of living, and it is measured by counting people whose income is below the poverty line.
Category: Measuring Poverty
Question 3
First passed in 1975, the federal tax credit that helps low-income working families and grows larger as earnings rise over its lowest range is known by the acronym EITC.
Missing Word
EITC
The EITC, the earned income tax credit, delivers help through the income tax system only to people who work; it rises with earnings at first, then levels off and phases out gradually, so it adds to the reward for working.
Category: The Safety Net
Question 4
The Lorenz curve compares a country's actual distribution of income with a perfectly equal one by plotting shares of the population against shares of total income.
Missing Word
Lorenz
The Lorenz curve compares the actual distribution of income with perfect equality; the farther it bows below the 45-degree line, the more unequal the distribution.
Category: Measuring Inequality
Question 5
Adding each group's income share to the shares of all lower-income groups gives a running total known as a cumulative share.
Missing Word
cumulative
A cumulative share is a running total, such as the share of income received by the bottom 40 percent, and these totals are the points used to draw a distribution curve.
Category: Measuring Inequality
Question 6
Each year the official U.S. income threshold for counting people as poor is updated for inflation, the general rise in the price level, so that it keeps the same buying power.
Missing Word
inflation
Inflation is a rise in the overall price level; adjusting the poverty line for it keeps the threshold equal in real terms so poverty rates can be compared across years.
Category: Measuring Poverty
Question 7
In the labor supply model, the economic term for any hour a person does not spend in paid work is leisure.
Missing Word
leisure
Leisure is time not spent in paid work; the budget constraint for an antipoverty program shows the tradeoff between hours of leisure and total income.
Category: The Poverty Trap
Question 8
The 1996 welfare reform set a lifetime limit of 5 years on federally funded cash welfare benefits for most recipients.
Missing Word
5
Most families can receive federally funded TANF benefits for no more than 5 years in total, a time limit intended to encourage recipients to move into paid work.
Category: The Safety Net
Question 9
Before the 1996 welfare reform, the main federal cash assistance program for low-income families with children was known by the acronym AFDC.
Missing Word
AFDC
AFDC, Aid to Families with Dependent Children, gave cash payments to poor families with children until the 1996 reform replaced it with a program of fixed grants to states.
Category: The Safety Net
Question 10
The federal food program once called food stamps, which gives eligible low-income households a monthly debit-style card for buying food, is known by the acronym SNAP.
Missing Word
SNAP
SNAP, the Supplemental Nutrition Assistance Program begun in 1964, is the program once called food stamps; its benefits fall gradually as household income rises.
Category: The Safety Net
Question 11
The program that provides food assistance to pregnant women, infants and young children from low-income families is known by the acronym WIC.
Missing Word
WIC
WIC, the Special Supplemental Nutrition Program for Women, Infants, and Children, targets nutrition for pregnant women, new mothers, infants and young children.
Category: The Safety Net
Question 12
The block-grant program created by the 1996 welfare reform, which requires most recipients to work or attend school, is known by the acronym TANF.
Missing Word
TANF
TANF, Temporary Assistance for Needy Families, gives each state a fixed federal grant and attaches work requirements and time limits to cash assistance.
Category: The Safety Net
Question 13
Created in 1965, Medicaid is a joint federal and state program that provides health insurance to some low-income people, including children, elderly people and people with disabilities.
Missing Word
Medicaid
Medicaid is the federal-state health insurance program for certain low-income groups; it differs from Medicare, the federal program for people 65 and older regardless of income.
Category: The Safety Net
Question 14
The program that pays monthly cash benefits to low-income elderly people and to low-income people with disabilities is known by the acronym SSI.
Missing Word
SSI
SSI, Supplemental Security Income, is a cash safety net program for elderly people and people with disabilities who have little income or few resources.
Category: The Safety Net
Question 15
The World Bank counts people in low-income countries as extremely poor when they live on less than a set number of dollars per person per day.
Missing Word
day
The World Bank sets international poverty lines as a daily amount per person, so a household's income is divided by its size and by the days in the year before comparing it with the line. These lines are far below the U.S. poverty line.
Category: Measuring Poverty