Will this program eliminate the poverty trap

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Reference no: EM13986825

A government program guarantees $18,000 in income, even for those who do not work at all. If the recipient earns income by working, then the $18,000 benefit is reduced by 50 cents for each $1 earned. Will this program eliminate the poverty trap?

Yes, enacting such a program will eliminate the poverty trap.

No, enacting such a program may still reduce the incentive to work.

Yes, and enacting such a program will cost the government less money.

Yes, enacting such a program will create adequate incentive to work.

Reference no: EM13986825

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