Increases in the minimum wage are intended to raise the incomes of low-income workers.Many economists favor a different policy to achieve this goal,a policy that avoids the deadweight losses that result from the minimum wage.What is this policy?
A)distribution of food stamps to low-income consumers
B)distribution of vouchers that can be used for rent or mortgage payments
C)the Alternative Minimum Tax
D)the earned income tax credit

Question

Quizplus · Accepted Answer

The policy that is favored by many economists to raise the incomes of low-income workers without deadweight losses is the earned income tax credit. This is a tax credit that is targeted to low-income workers and is based on their income and family size. It is seen as a more efficient way to raise the incomes of low-income workers compared to the minimum wage, which can result in job losses and other unintended consequences.

Increases in the Minimum Wage Are Intended to Raise the Incomes