1. Relative poverty might be defined based on the:
A. relative proportion of income spent on food
B. upper limit of income in the lowest one-fifth of the income distribution.
C. amount of money needed to buy a basket of goods and services
D. ratio of food expenditures to housing expenditures.
2. Assume someone with no income gets $1000 per month in benefits and there is a benefit-reduction rate of 60%. Someone that earns $1200 per month would have how much total income (including wage and benefits)?
A. $1200
B. $1480
C. $1280
D. $1720
3. Assume someone with no income gets $1000 per month in benefits and there is a benefit-reduction rate of 60%. Lowering the benefit reduction rate to 30% would:
A. Increase the incentive to work but increase the size of the program for taxpayers
B. Decrease the incentive to work and decrease the size of the program for taxpayers
C. Decrease the incentive to work and increase the size of the program for taxpayers
D. Increase the incentive to work and decrease the size of the program for taxpayers