Why Does the United States Adjust the Welfare System to Allow

question 7

Multiple Choice

Why does the United States adjust the welfare system to allow certain benefits to persist for only certain periods of time?

• A)Humans are fundamentally entitled to only a certain amount of government benefits.
• B)Welfare service provision is easier to administer over shorter time periods.
• C)Limited allowance of benefits minimizes the provision of public goods.
• D)Limitations create incentives that make people prefer working to the low income they get from welfare.
• E)Unavailability of welfare drives up wages.

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Definitions:

Straight-Line Method

A method of allocating the cost of a tangible asset over its useful life in equal annual installments.

Net Present Value

A method used to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and outflows over a period.

Discount Rate

The interest rate used in discounted cash flow (DCF) analyses to determine the present value of future cash flows.

Payback Period

The period needed to recoup the expenses of an investment.