Income Supplements Large Enough to Significantly Increase the Economic Status

question 94

Multiple Choice

Income supplements large enough to significantly increase the economic status of poor people will

• A) encourage behavior that increases the risk of poverty.
• B) create high implicit marginal tax rates that reduce the incentive of transfer recipients to earn.
• C) provide low-income recipients with a strong incentive to work and increase their earnings so they will not be dependent on income transfers.
• D) do both a and b.

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Definitions:

Authoritative Body

An organization or institution possessing the power, credibility, and legitimacy to enforce rules, make decisions, and govern within a specific domain or sector.

Formal Institution

An establishment founded on established laws and organized principles, playing a critical role in society, such as governmental bodies, educational institutions, and corporations.

Culture

The collective beliefs, behaviors, objects, and other characteristics common to the members of a particular group or society.

Ethnocentrism

is the belief in the inherent superiority of one's own ethnic group or culture, often leading to prejudice and discrimination against others.