Sheldon Cleaver Commented on the Difficulty People Have in Overcoming

question 137

Multiple Choice

Sheldon Cleaver commented on the difficulty people have in overcoming poverty in the United States: "Most people whose incomes fall below the poverty line have difficulty pulling themselves above the line in future years. In this sense, poverty becomes a vicious cycle. I believe the psychological damage households face when they are branded with the 'poverty' label in our society is a major factor in their remaining in poverty. Despair is a major reason why the percentage of people with incomes that lie below the poverty line never falls below 10 percent." Which of the following correctly evaluates Cleaver's statement?

• A) Cleaver is correct. Economists often fail to take into account psychological factors when they analyze poverty and the distribution of income in the United States. Policies must take such factors into account if we are to make progress in eliminating poverty.
• B) Cleaver is correct when he notes that poverty is a chronic problem. The best way to reduce poverty is to force the poor to become better educated so that they can work their way out of poverty.
• C) Cleaver is correct, but he is looking at the wrong statistic. The official poverty line understates the true degree of poverty in the United States.
• D) Cleaver assumes that all those with incomes below the poverty line in one year remain in poverty in subsequent years. In fact, research has shown that the number of people who remain in poverty for many years is much smaller than the number who are in poverty during any one year.

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Definitions:

Operating Lease

A lease agreement allowing a company to use an asset without the risks of ownership, like an asset's obsolescence.