Labour Market Economics Canadian 8th Edition By Benjamin – Test Bank

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1. 1)  All of the following government programs are types of income maintenance programs except A) wage subsidy.

   B) social assistance.
   C) negative income tax schemes. D) unemployment insurance.
   E) the child tax credit.

   Answer: E

2. 2)  All of the following are sources of concern with income maintenance programs except that: A) They might reduce wages.

   B) They might increase wages.
   C) They might reduce work incentives. D) They might be fiscally costly.
   E) They might lower employment.

   Answer: A

3. 3)  All of the following describe a demogrant except:
   1. A)  an income grant to a specific demographic group
   2. B)  the simplest income maintenance program
   3. C)  A demogrant shifts the potential income constraint vertically upward by the amount of the

      grant.

   4. D)  A grant whose amount varies with the worker’s wage
   5. E)  a lump-sum transfer

   Answer: D

4. 4)  Which of the following programs is an example of a demogrant? A) Quebec Pension Plan (QPP) Benefits

   B) The Guaranteed Income Supplement C) Old Age Security (OAS)
   D) Canada Pension Plan (CPP) Benefits E) The Child Tax Benefit

   Answer: C

5. 5)  Which of the following is NOT a way to improve work incentives for welfare recipients? A) Raise the benefit level.

   B) Alter the preferences that certain recipients might have for leisure compared to work.
   C) Provide welfare recipients with job training and counseling services.
   D) Increase the market wages for jobs for which welfare recipients might be qualified to perform. E) Reduce the very high implicit tax rate that is applied to the earnings of welfare recipients.

   Answer: A

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