The Income Reduction Hypothesis wrongly assumes that public assistance reduces poverty, ignoring the fact that recipients must remain poor in order to continue receiving benefits and that:
A) poor people like being poor, because it allows them to work less.
B) poor people are more motivated than other classes.
C) large amounts of income transfers go to middle class people.
D) working class people are often formerly poor.
E) poverty appears to be linked to genetics.

Question

Quizplus · Accepted Answer

The Income Reduction Hypothesis wrongly assumes that public assistance reduces poverty, but large amounts of income transfers actually go to middle class people. This means that public assistance may not be effectively reducing poverty as intended. None of the other choices provide a correct explanation for the flaw in the Income Reduction Hypothesis.

The Income Reduction Hypothesis Wrongly Assumes That Public Assistance Reduces