Suppose the Current Welfare System Is Completely Eliminated and Replaced

question 42

Multiple Choice

Suppose the current welfare system is completely eliminated and replaced with a negative income tax.The tax credit granted to everyone is $10,000 and the tax on earnings is 25%.
-Refer to the above information.Under the negative income tax,each extra dollar earned causes total income to

• A) remain constant.
• B) fall by 25 cents.
• C) rise by 25 cents.
• D) rise by 75 cents.
• E) rise or fall;it depends on whether one is above or below the breakeven level of income.

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Definitions:

Aggressive Behavior

Involves actions that can cause harm or damage to others, often characterized by physical or verbal hostility.

Helping Behavior

Actions intended to provide assistance or benefits to another individual or group without anticipation of personal gain.

Phobic Behavior

An excessive and irrational fear response, usually triggered by a specific object or situation.

Response Prevention

Also known as flooding, a behavior therapy in which a phobia is eliminated by forced exposure to the feared stimulus without an aversive consequence.