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: 3

Answer

(a) The government could consider policies to improve job opportunities. b) The government could consider policies to enhance educational opportunities. (c) We can seek to minimize expenditure on new social services in order to maximize expenditure on increasing economic mobility.

Work Step by Step

(a) Increased employment opportunities would increase labor demand and the wages paid to those workers. In turn, the government should increase the funding for the job fare system (instead of the welfare program). The funds will allow people with smaller wages to go to work. (b) Expanded employment opportunities would improve the availability of human resources. (c) The downside of rising spending to increase economic stability is that there is more motivation to work hard to step on. However, the cost of these services can be challenging for those who will not find their way through the system.
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