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4 September, 16:22

A government program guarantees $18,000 in income, even for those who do not work at all. If the recipient earns income by working, then the $18,000 benefit is reduced by 50 cents for each $1 earned. Will this program eliminate the poverty trap

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  1. 4 September, 19:19
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    Question Options:

    Yes, enacting such a program will eliminate the poverty trap.

    No, enacting such a program may still reduce the incentive to work.

    Yes, and enacting such a program will cost the government less money.

    Yes, enacting such a program will create adequate incentive to work.

    Answer:No, enacting such a program may still reduce the incentive to work.

    Explanation: Poverty trap can be defined as a self-reinforcing cycle which allows poverty to persist. This poverty trap is the worst form of poverty. In this situation an increase in someone's income is offset by a consequent loss of state benefits, leaving them no better off.
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Home » Business » A government program guarantees $18,000 in income, even for those who do not work at all. If the recipient earns income by working, then the $18,000 benefit is reduced by 50 cents for each $1 earned. Will this program eliminate the poverty trap
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