Econ 102 Homework Chapter 16

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Great Basin College *

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102

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Economics

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Apr 27, 2024

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1 Econ 102 Module 13 Assignment General Instructions: Please provide your answers to the following in the spaces provided, and then upload your finished document to WebCampus. Don’t forget to save a copy of your document before turning it in. Technical Instructions:  If you need to draw a straight line: Click Insert, Shapes, select the straight downward sloping line. At this point, the cursor should change to a + sign. Position the plus sign over the point where you want to start the line, click and hold the left mouse button, then drag the line to the point where you want the line to end. Release the mouse. Then you can move the line around by clicking on the line and adjusting it in various ways.  If you need to draw a curved line: Click Insert, Shapes, select the shape called "arc." At this point, the cursor should change to a + sign. Position the plus sign over the point where you want to start the curved line, click and hold the left mouse button, then drag the line to the point where you want the line to end. Release the mouse. Then you can move the line around by clicking on the line and adjusting it in various ways. Clicking on the green handle at the top of the curve allows you to rotate the curve.  If you need to draw a label of any kind: Click Insert, Text Box, Simple Text Box. You can then type inside the box, and move it around by clicking on the handles on the perimeter of the box.  If you need to color a line or curve: Right click on the line, select Format Auto Shape, Color. You can also change the line to a dotted line from this screen as well. If you are using Open Office or some other word processor, the steps will be quite similar, but not exactly the same. In any case, do some experimenting and get some help if necessary; and you will do fine. This is not an art class, and I don’t expect perfection in these matters. Each question on this assignment will be assigned point values, for a total of 10 points for this assignment. Student Name: rylee Renfroe

2 1. Describe how each of these changes is likely to affect poverty and inequality. (2 points) A) Incomes rise for low-income and high-income workers, but rise more for high- income earners- poorly B) Incomes fall for low-income and high-income workers, but fall more for high-income earners- greatly C) Incomes rise for low-income workers, but do not change for the high-income earners- greatly D) Incomes fall for the high-income workers, but do not change for the low-income earners-poorly 2. How does the earned income credit attempt to loosen the poverty trap? (1 point) The earned income tax credit works like this: a poor family receives a tax break that increases according to how much they work. Families that work more get more. In that sense it loosens the poverty trap by encouraging work. As families earn above the poverty level, the earned income tax credit is gradually reduced. 3. How does TANF attempt to loosen the poverty trap? (1 point) TANF attempts to avoid the poverty trap by requiring that welfare recipients work and by limiting the length of time they can receive benefits. In its first few years, the program was quite successful. 4. How did the expansion of Medicaid in the late 1990s attempt to help loosen the poverty trap? (1 point) 5. How might the food stamps program contribute to the poverty trap? (1 point) TANF attempts to avoid the poverty trap by requiring that welfare recipients work and by limiting the length of time they can receive benefits. In its first few years, the program was quite successful. 6. Why do few economists believe that the tax cuts of the early 1980s, which focused to some extent on high-income taxpayers, were a primary cause of the rise in income inequality that the US economy has experienced? (1 point) Reducing marginal tax rates to spur economic growth is a commonly used policy with the notion that lower tax rates will give people more after-tax income that could be used to buy more goods and services. This is a demand-side argument to support a tax reduction as an expansionary measure. 7. The TANF welfare reforms of 1996 led to a sharp reduction in the number of families receiving welfare. So why do few economists view this change as a possible primary explanation for the rise in income inequality that the US economy has experience? (1 point) 8. Which set of policies is more likely to cause a tradeoff between economic output and equality: policies if redistribution or policies aimed at the ladder of opportunity? Explain briefly. (1 point) Pure redistribution is more likely to cause a sharp tradeoff between economic output and equality than policies aimed at the ladder of opportunity.

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