If Welfare Benefits Equal the Poverty Gap for Each Household

question 57

Multiple Choice

If welfare benefits equal the poverty gap for each household in poverty,then the

• A)Effective marginal tax rate for welfare recipients is 100 percent.
• B)Poor have a strong incentive to begin working.
• C)The poverty gap will become greater.
• D)Production possibilities curve will shift to the right.

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Definitions:

Economic Development

The process by which a country improves the economic, social, and political well-being of its people through growth and the efficient management of resources.

Social Classes

Categories of individuals in a society distinguished by relative position or status, often determined by wealth, occupation, education, or familial lineage.

Intractable Ruling Classes

Powerful societal groups that are resistant to change and maintain their position through control of resources and institutions.

Disadvantaged

Individuals or groups lacking in advantage, opportunity, or resources, often due to socio-economic conditions.