1. A high-income household is taxed a certain amount of money. A low-income household receives financial assistance in the same amount from government. The value of the marginal dollar of the financial assistance to the family and the taxes paid by the high-income family are:

A. the same, since it is the same amount of money.
B. unimportant in determining the impact of this plan on the welfare state.
C. different, since the high-income family's lost income will keep them from buying necessities.
D. different, since the marginal dollar is worth more to the low-income family.

2. Progress in medical science has contributed to _____ health care costs.
A. Constant
B. Randomly Fluctuating
C. Increasing
D. Decreasing

3. In the United States since World War II, the distribution of income has:
A. become more unequal
B. become more nearly equal
C. changed first toward equality and then, after 1968, toward greater inequality
D. stayed about the same

4. Political conservatives and liberals:
A. have conflicting views; liberals support programs associated with the welfare state, while conservatives oppose such programs
B. both oppose programs associated with the welfare state
C. generally agree on their support of programs associated with the welfare state but disagree on the appropriate extent of these programs.
D. have conflicting views; conservatives support programs associated with the welfare state, while liberals oppose such programs

5. Compared to other countries of comparable wealth, the United States has:
A. similar levels of poverty
B. unusually high poverty rates
C. low levels of poverty only when relative measures of poverty are used
D. relatively low levels of poverty

6. Much of the rise in income inequality in the past 20 years in the United States comes from:

A. declining government controls on wage supports.
B. the use of median income levels instead of mean income levels
C. a predictable rising gap between the incomes of highly educated and less well educated workers
D. a rising gap among the incomes of highly educated workers


7. In the United States and other wealthy countries, a large part of the welfare state is devoted to payments for:
A. Temporary Aid to Needy Families
B. health care
C. unemployment insurance
D. food stamps