The Federal Government's Spending on AFDC Fell After the Mid-1970s

question 13

Multiple Choice

The federal government's spending on AFDC fell after the mid-1970s because

• A)the Supreme Court's decision in Goldberg v.Kelly prohibited more than 15 percent of the budget from being spent on welfare.
• B)unlike Social Security, the program was not indexed to inflation.
• C)fewer and fewer people needed the benefits provided by the program.
• D)the program's cost-of-living adjustments were linked to real gross domestic product rather than to inflation.

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Definitions:

Redistribution

The reallocation of income, wealth, or resources among individuals or groups in a society.

Economic Discrimination

Unfair treatment of individuals based on economic factors, such as income, wealth, or consumption patterns.

Diagram

A diagram is a simplified drawing showing the appearance, structure, or workings of something; used extensively to explain economic theories and models.

Crowding Model

A theory suggesting that public sector spending reduces the amount of resources available for the private sector.