Review Questions

1.
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What is the distinction between an absolute and relative poverty standard? How is poverty measured in the United States?
2.
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Unfortunately, the grand duchy of Optimisticonia was recently dealt a devastating blow: The economy almost collapsed, and everyone's real incomes were cut in half. Nevertheless, the official poverty rate remained completely unchanged! How is this possible, given that the government did not cook the books?
3.
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Outline the main trends in poverty in the United States over the last 50 years or so.
4.
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What is meant by the benefit reduction rate, BRR? If the BRR is 20%, then how much would a welfare participant gain if he or she earned an extra $10?
5.
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Critically evaluate the following claim:
It's hard to do it because you gotta look people in the eye and tell 'em they're irresponsible and lazy. And who's gonna wanna do that? Because that's what poverty is, ladies and gentlemen. In this country, you can succeed if you get educated and work hard. Period. Period.
—Bill O'Reilly, The Radio Factor, 6/16/04
6.
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Explain what is meant by a link to benefit. Give some U.S. instances of linked-benefit programs.

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