Chapter 20 Flashcards
Transfer payments are
payments to individuals for which no current goods or services are exchanged.
When a program is means-tested, it means that
to be eligible, the recipient must have little income.
The official poverty index is based on
family size and income.
Transfer payments include all of the following except
a church-run thrift store for the poor.
Which of the following programs is the largest federal income transfer program?
Social Security
Which of the following programs is the second-largest federal income transfer program?
Medicare
Which of the following is not an example of in-kind income?
unemployment benefits
Social Security benefits paid by the federal government
are income transfers financed by taxes on workers and employers.
The percentage of income transfers that go to their intended recipients and purposes refers to the
target efficiency.
Which of the following programs is likely to have low target efficiency?
a cash payment that the recipient is encouraged to use for housing
Welfare programs differ from social insurance programs in that welfare programs
offer benefits only to the needy.
The existence of transfer programs implies that
market failure has occurred.
The existence of income transfer programs can
decrease the incentive to work and reduce income and output.
The shortfall between actual income and the poverty threshold is the
poverty gap.
(Figure 34.3). The implied marginal tax rate is
100 percent
A transfer program that uses means testing to identify who is eligible for benefits is known as
Welfare
An unfair distribution of incomes is the result of
market failure.
Which of the following is not a determinant of eligibility for Social Security benefits?
having low income
The primary eligibility requirement for Social Security is
age
If welfare benefits equal the poverty gap for each household in poverty, then the
effective marginal tax rate for welfare recipients is 100 percent.
