The increase in a household's well-being resulting from participation in a targeted transfer program becomes larger (all else equal)when?
A) The program raises the household's non-labor income by more; or when it requires to households to undertake fewer costly behaviors
B) The program raises the household's labor income by more; or when it requires the household to undertake more costly behaviors
C) The program raises the household's asset value; or simply increases their labor hours
D) The program lowers the threshold to qualify for the program; or includes more poor families into the program

Question

Quizplus · Accepted Answer

When a targeted transfer program raises a household's non-labor income without requiring the household to undertake costly behaviors, the household's overall income (including the transfer payment) increases, leading to an increase in well-being. In contrast, if the program requires the household to undertake costly behaviors, such as work requirements or training, the increase in well-being may be less significant. Therefore, option A is the best choice.

The Increase in a Household's Well-Being Resulting from Participation in a Targeted