Chapter 18: Problem 44

Which statement is false? (LO5) a) Nearly half of all poor Americans own their own homes. b) A poor person today has roughly the same standard of living as a middle- income person 30 years ago. c) The reported consumption spending of people in the lowest income quintile is about twice their reported income. d) The standard of living of American's poor is comparable to that of most of the rest of the world's poor people.

Short Answer

Expert verified

The false statement is: d) The standard of living of American's poor is comparable to that of most of the rest of the world's poor people.

Step by step solution

Evaluate statement a

To evaluate statement a ("Nearly half of all poor Americans own their own homes."), check for available statistics about homeownership among poor Americans. If it is true that nearly half of poor Americans own their houses, then this statement can be considered true.

Evaluate statement b

To evaluate statement b ("A poor person today has roughly the same standard of living as a middle-income person 30 years ago."), research the changes in standards of living for poor and middle-income Americans over the past 30 years. If the standard of living for a poor person today is approximately the same as a middle-income person 30 years ago, the statement would be considered true.

Evaluate statement c

Evaluate statement c ("The reported consumption spending of people in the lowest income quintile is about twice their reported income.") by researching the consumption spending and reported income of people in the lowest income group. If the data shows that the consumption spending is around twice their reported income, then this statement can be considered true.

Evaluate statement d

To evaluate statement d ("The standard of living of American's poor is comparable to that of most of the rest of the world's poor people."), compare the living standard of American's poor population with the poor population globally. If available data demonstrates that the standard of living is approximately the same between these two groups, the statement would be considered true.

Identify the false statement

After evaluating each statement, determine which of them is false. The false statement will be the one where the facts or data do not support the given statement. In this example, assuming the data supports statements a, b, and c, the false statement would then be: d) The standard of living of American's poor is comparable to that of most of the rest of the world's poor people.

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