Politicians might hesitate to increase income and in-kind transfers to the poor because this could cause

Question

Quizplus · Accepted Answer

Increasing income and in-kind transfers to the poor can lead to an increase in overall demand for goods and services, as those with lower incomes are likely to spend a larger proportion of any additional income they receive. This can potentially lead to inflationary pressures if the demand exceeds the economy's capacity to produce.

Politicians Might Hesitate to Increase Income and In-Kind Transfers to the Poor