Chapter 12: POVERTY, INEQUALITY, + DISCRIMINATION

Question 1

A measure of a country’s total output to gauge its economic size

Answer 1

GDP

Question 2

Total GDP divided by the population

Answer 2

GDP per capita

Question 3

Lacking even the basic necessities, which typically include adequate food, clean water, safe housing, and access to healthcare

Answer 3

absolute poverty

Question 4

A certain level of income that defines the income one needs for a basic standard of living

Answer 4

poverty line

Question 5

When a person lacks the financial resources for a minimum standard of living

Answer 5

poverty

Question 6

How unevenly income is distributed throughout a population

Answer 6

income inequality

Question 7

The percentage of the population below the poverty line in any given year

Answer 7

poverty rate

Question 8

A state of living where people can afford necessities but are unable to meet their society’s average standard of living

Answer 8

relative poverty

Question 9

Money earned, on a regular basis, from working or through investments

Answer 9

income

Question 10

When there is an equal share of all output or income

Answer 10

perfect equality

Question 11

The value of all assets owned minus any debts; also known as “net worth”

Answer 11

wealth

Question 12

Graphs income and wealth distribution of a population where the Y-axis has cumulative income or wealth and the X-axis is the percentile of the population

Answer 12

Lorenz curve

Question 13

A numerical value of income or wealth inequality in an economy; it is the area between the equal distribution line and the Lorenz curve divided by the area under the equal distribution line

Answer 13

Gini coefficient

Question 14

The Gini coefficient as a percentage (the Gini coefficient multiplied by 100)

Answer 14

Gini index

Question 15

Any of five equal groups into which a population can be divided

Answer 15

quintile

Question 16

“The differential treatment of workers because of nonessential differences in characteristics; that is, economically identical persons are treated differently within the market because of their race” -Dr. Patrick Mason

Answer 16

racial discrimination in the labor market

Question 17

Intentional, clearly expressed (as it relates to racial discrimination)

Answer 17

explicit

Question 18

Without intention, due to biases (as it relates to racial discrimination)

Answer 18

implicit

Question 19

A cycle that makes it very hard for people to escape poverty; created when a system requires a lot of capital in order to earn enough to escape poverty

Answer 19

poverty trap

Question 20

Those who have incomes just above the poverty line

Answer 20

near-poor

Question 21

U.S. government programs that offer some protection for those below the poverty line and just above the poverty line who find themselves without jobs or income

Answer 21

safety net

Question 22

A method of assisting the working poor through the tax system; first passed in 1975, it is one of the largest assistance programs for low-income groups

Answer 22

earned income tax credit (EITC)

Question 23

A federally funded program, started in 1964, in which each month poor people receive a card like a debit card that they can use to buy food

Answer 23

Supplemental Nutrition Assistance Program (SNAP)

Question 24

A joint health insurance program between the states and the federal government that provides medical insurance for certain low-income people, including those below the poverty line, with a focus on families with children, the elderly, and the disabled

Answer 24

Medicaid

Question 25

Taking income from those with higher incomes and providing income to those with lower incomes

Answer 25

redistribution

Question 26

A tax system in which the rich pay a higher percent in income taxes than the poor

Answer 26

progressive tax system

Question 27

Total taxes paid divided by total income (all sources of income such as wages, profits, interest, rental income, and government transfers such as veterans’ benefits)

Answer 27

effective income tax

Question 28

A tax imposed on the value of an inheritance

Answer 28

estate tax