1. The United States government uses only a household’s cash income before taxes to determine whether that household falls below the poverty line in a given year; capital gains, non-cash government benefits, and tax credits are not included. However, yearly cash income is not a fool-proof measure of a given household’s disposable income. For example, retirees who live off of capital gains from an extensive portfolio could earn hundreds of thousands of dollars, yet be classified by the government as living in “poverty” because this income is not included in the calculation. Which of the following, if true, validates the contention that the government’s calculation methods must be altered in order to provide statistics that measure true poverty?
A For more than 99% of those classified as living in poverty, yearly cash income comprises the vast majority of each household’s disposable income.
B While the government’s calculation method indicated a 12.5% poverty rate in 2003, the same calculation method indicated anywhere from a 9% to a 16% poverty rate during the preceding decade.
C Most established research studies conducted by the private sector indicate that the number of people truly living in poverty in the U.S. is less than that indicated by the government’s calculation method.
D Several prominent economists endorse an alternate calculation method which incorporates all income, not just cash income, and adjusts for taxes paid and other core expenses.
E The government’s calculation method also erroneously counts those who do not earn income in a given year but who have substantial assets on which to live during that year.
2. Historically, the drug industry promoted its products to physicians by educating them in their offices or at industry conferences. In the last 10 years, it has become much more commonplace for drug companies to advertise prescription drugs directly to consumers, via television advertising and other media. Some public health advocates have become concerned that patients, encouraged by advertising, may pursue the use of prescription drugs that may be inappropriate for the individual patient or situation. However, since physicians must prescribe these medications, there is no reason for such concern. Which of the following pieces of information would be most helpful in addressing the concern articulated by the public health advocates?
A Certain over-the-counter medications are as effective for many common medical conditions as more powerful nonprescription medications.
B Prescription medication television advertisements directed at the general public only appear on certain programs and are not seen by many potential consumers.
C Physicians are also subject to prescription drug advertisements that are directed toward consumers.
D Physicians are not susceptible to pressure from patients in determining appropriate courses of treatment, including drug prescriptions.
E Prescription medicines have been proven to be safe and effective treatments for many patient conditions.
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