Use the following formula to answer the indicated question: Welfare benefit = Maximum benefit - Wages A welfare system based on the welfare formula given

A. Will increase the risk of moral hazard.
B. Will increase the number of people eligible for welfare.
C. Has an effective marginal tax rate of 50 percent for welfare recipients.
D. Will increase work incentives.


Answer: A

Economics

You might also like to view...

50% of the national income in an economy goes to labor. If this economy has a Cobb-Douglas production function, ________ of its national income should go to capital

A) 50% B) 15% C) 20% D) 30%

Economics

In the calculation of gross domestic product by the expenditure approach, the "investment" component is

A) net investment. B) gross investment minus depreciation. C) gross investment plus depreciation. D) gross investment.

Economics

There is anecdotal evidence to suggest that global inequalities are often rooted in inequities

Indicate whether the statement is true or false

Economics

When measuring GDP, only final goods and services are counted in order to avoid double counting

Indicate whether the statement is true or false

Economics