Changes

The poverty-level income for a family of four in America: which of the following can be said about how the government definition of this specific income level?

The poverty-level income for a family of four in America: which of the following can be said about how the government definition of this specific income level?

(A) It is used to determine eligibility for Social Security benefits.

:(A) It is used to determine eligibility for Social Security benefits.

<br>(B) It proves that 50% of Americans live in poverty.

:(B) It proves that 50% of Americans live in poverty.

<br>(C) It falls when welfare benefits increase.

:(C) It falls when welfare benefits increase.

<br>(D) It is calculated by multiplying the cost of a nutritionally adequate diet by three.

:(D) It is calculated by multiplying the cost of a nutritionally adequate diet by three.

<br>(E) It is not adjusted each year for changes in the cost of living.

:(E) Government does not adjust this number due to changes in the cost of living (inflation).

Virtually none of you would know the answer to this question at first glance.  The question is not really appropriate for a microeconomics exam, but CLEP asks it anyway.  Questions about poverty, gaps between the rich and poor, and government programs are always favorites among liberal educators.  You will see many more questions about these issues than about the invisible hand or the creation of wealth.

Virtually none of you would know the answer to this question at first glance.  The question is not really appropriate for a microeconomics exam, but CLEP asks it anyway.  Questions about poverty, gaps between the rich and poor, and government programs are always favorites among liberal educators.  You will see many more questions about these issues than about the invisible hand or the creation of wealth.

Let’s start with choice (B).  Think about it: is half of our nation living in poverty?  What would that mean for elections?  Who would pay to run government?  If we called half of us "poor", then what word would be use for the really poor?  Choice (B) can't be true.  Using common sense, we can eliminate this answer.

Let’s start with choice (B).  Think about it: is half of our nation living in poverty?  What would that mean for elections?  Who would pay to run government?  If we called half of us "poor", then what word would be use for the really poor?  Choice (B) can't be true.  Using common sense, we can eliminate this answer.

<>Let’s turn to choice (E): “It is not adjusted each year for changes in the cost of living.” Why wouldn’t it be adjusted?  Poverty must be relative to the cost of living.  If the cost of living doubled, then the numbers in poverty would increase greatly.  But failure to adjust for the cost of living would miss that effect.  Again, common sense leads us to eliminate this answer.

Let’s turn to choice (E).  Why wouldn’t it be adjusted?  Poverty must be relative to the cost of living.  If the cost of living doubled, then the numbers in poverty would increase greatly.  But failure to adjust for the cost of living would miss that effect.  Again, common sense leads us to eliminate this answer.

Next we can turn to choice (A): “It is used to determine eligibility for Social Security benefits.”  That cannot be true: virtually everyone must pay Social Security taxes, and then receive benefits when they become old.  All politicians, rich or poor, defend Social Security.  “Social security” is not “security only if you’re poor.”  We can eliminate this choice.

<>Next we can turn to choice (A): “It is used to determine eligibility for Social Security benefits.”  That cannot be true: virtually everyone must pay Social Security taxes, and then receive benefits when they become old.  All politicians, rich or poor, defend Social Security.  “Social security” is not “security only if you’re poor.”  We can eliminate this choice.

We’re left with only two possibilities: (C) and (D).  Now our odds are 50% even if we just guess.  If you took the CLEP and at least narrowed every difficult question down to two choices, then you would likely pass.  But can we do better than a blind guess between these two choices?

We’re left with only two possibilities: (C) and (D).  Now our odds are 50% even if we just guess.  If you took the CLEP and at least narrowed every difficult question down to two choices, then you would likely pass.  But can we do better than a blind guess between these two choices?