Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 20 - Part VI - Income Inequality and Poverty - Problems and Applications - Page 431: 2

Answer

The allocation of government money has an impact on how many people are affected by poverty. Economic security, which requires transfer payments, was the largest form of government spending (in 2011). Such compensation benefits include social security for the poor and the sick, disability insurance schemes and benefit transfers. The second largest category (in 2011) concerned health programs such as Medicare and Medicaid.

Work Step by Step

Elderly individuals are beneficiaries of both social security benefits (via Social Security) and insurance services (via Medicare). Members in disadvantaged families are beneficiaries in welfare benefits and Medicare (and likely disability compensation programs).
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