The topping- up mechanism:
A)insures Pareto optimality.
B)is the most efficient transfer mechanism available.
C)is also called the negative income tax.
D)is a version of the welfare system.

Question

Quizplus · Accepted Answer

The topping-up mechanism is a version of the welfare system. It involves providing additional income or support to individuals or households who are below a certain income level. It is not necessarily the most efficient transfer mechanism available, and it does not insure Pareto optimality. The negative income tax is a specific type of topping-up mechanism where individuals receive money from the government if their income falls below a certain level.

The Topping- Up Mechanism