Suppose a government program guarantees $ 2,000 a month in income, even for those who do not work at all. However, if the recipient earns income by working, the benefit is reduced by 50 cents for each $1 earned. Which of the following statements is true? O This program will redefine the proverty line. While the goal may be to reduce poverty, people rarely respond to incentives. O This program will reduce the incentive to work significantly. O The goal of this program is to increase the incentive to work, reducing the poverty trap.

Suppose a government program guarantees $ 2,000 a month in income, even for those who do not work at all. However, if the recipient earns income by working, the benefit is reduced by 50 cents for each $1 earned. Which of the following statements is true? O This program will redefine the proverty line. While the goal may be to reduce poverty, people rarely respond to incentives. O This program will reduce the incentive to work significantly. O The goal of this program is to increase the incentive to work, reducing the poverty trap.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter15: Poverty And Economic Inequality

Section: Chapter Questions

Problem 4SCQ: We have discovered that the welfare system discourages recipients from working because the more...

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