Under a guaranteed minimum annual income plan,if the minimum income level is $5000 with a benefit-reduction rate of 50 percent,and if a family had earnings of $4000,it would receive annual transfer payments of:

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The family's earnings of $4000 are $1000 less than the guaranteed minimum income of $5000. The benefit-reduction rate of 50 percent means that for every dollar less than the guaranteed minimum income, the family will receive 50 cents in transfer payments. Therefore, the family will receive $5000 - ($1000 x 50%) = $3000 in annual transfer payments.

Under a Guaranteed Minimum Annual Income Plan,if the Minimum Income