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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Think about the business cycle: during a recession, unemployment increases; it decreases in an expansionary phase. Explain what happens to TANF, SNAP, and Medicaid programs at each phase of the business cycle (recession, trough, expansion, and peak).

To determine

The changes happening to TANF, SNAP, and Medicaid programs at each phase of the business cycle (recession, trough, expansion, and peak).

Explanation

First, let us understand how the anti-poverty programs (TANF, SNAP, and Medicaid) work.

TANF: In 1996, TANF (Temporary Assistance to Needy Families) was launched replacing AFDC (Aid to Families with Dependent Children). Under TANF, the federal government provides a fixed amount of money to the states and the state then decides how it is going to spend that money in the welfare schemes having anti-poverty element. The states receiving TANF grants must enforce conditions on the recipients that they are either working or go to school. In addition, any TANF recipient can receive grant only up to a total of five years. TANF helps poor families by providing aid and at the same time inducing them to work and become self-sufficient by imposing the above conditions.

SNAP: Supplemental Nutrition Assistance Program was launched in 1964. Under this program, the poor receive a debit card like card which can be used to buy food. The poor must spend 30% of their net income on food and if that is not enough, they can use this card to supplement food requirements

Medicaid: Medicaid is a health insurance program and was launched in 1965. Its expenditure is shared by federal government and states...

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