Suppose That the Government Were to Directly Subsidize the Market

Multiple Choice

Suppose that the government were to directly subsidize the market wages of those already on welfare for one month.Which of the following is TRUE?

A) This type of program creates disincentives to work for those receiving welfare.
B) This type of program can result in increased rates of enrollment in the welfare program.
C) This type of program is typically more costly than a general wage subsidy to the labor supply of the lowest-income workers.
D) This type of program has no effect since welfare benefits must be reduced to compensate for wages earned.