Social Welfare and Poverty
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The welfare system provides income for people who are very poor, with low incomes and few assets. If a recipient of welfare payments decides to work and earn some money, the amount he or she receives in welfare payments is reduced.a. How does the existence of the welfare system affect people's incentive to save money for the future?b. How does the reduction in welfare payments associated with higher earnings affect welfare recipients" incentive to work?
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