Please show all work/explanations to get all the points The poverty rate would b

Question

Please show all work/explanations to get all the points

The poverty rate would be substantially lower if the market value of in-kind transfers were added to family income. The largest in-kind transfer is Medicaid. Let's say the program costs $7,000 per recipient family. If the government gave each recipient family a $7,000 check instead of enrolling them in the Medicaid program, do you think that most of these families would spend that money to purchase health insurance ? Why or why not ? (Recall that the poverty level for a family of four is about $20,000.) How does your answer to part (a) affect your view about whether we should provide assistance to the poor in the form of cash transfers or in-kind transfers ? Briefly explain.

Explanation / Answer

a. No. Any payment given in cash will be divided between all good that the family has not reached a satiation point in. Poor people have a lot of goods that have not reached their satiation point, including food and housing.

b. It doesn't. We should determine the poverty rate by valuing in-kind transfers at the price the family would have had to pay for the same amount of the good regardless of how the family would spend a cash transfer.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.