Krugman's Economics For The Ap® Course
Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
Question
Book Icon
Chapter 14R, Problem 25MCQ
To determine

The correct option for low-income workers which would be an effective way to prevent means-tested antipoverty programs from creating a disincentive to work

Expert Solution & Answer
Check Mark

Answer to Problem 25MCQ

From the available options, the correct option is a low marginal tax rate.

Explanation of Solution

As Means-tested programs are the programs that limit the eligibility to individuals as well as family members whose income, earnings, or assets are below the pre-determined level of income or pre-determined threshold which means with the implementation of the low marginal tax rate, workers with low income can be effectively prevented from doing a disadvantaged or disincentive work. A high and average tax rate cannot improve the level of income of the person and the elimination of benefits for employees will ruin their earnings. And, the notch-based program can improve productivity or increase the stress of workers with low-level income but cannot increase their level of income.

Therefore, the correct option is e (a low marginal tax rate), and all options: a, b, c, and d are incorrect.

Economics Concept Introduction

Introduction: Antipoverty programs are the programs or schemes which work for the elimination or reduction of the poverty rate in the country. These programs include proper access to food, shelter, basic support, health, etc., for each individual who is living under the poverty line.

Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:9780190931919
Author:NEWNAN
Publisher:Oxford University Press
Text book image
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Text book image
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education