Which is a moral hazard associated with transferring money from high-income to low-income groups?

Question

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If individuals reduce their labor supply to qualify for means-tested transfers, this leads to a moral hazard known as “welfare trap” or “poverty trap.” This occurs when individuals choose to remain in poverty or underemployed to obtain benefits. This is an unintended consequence of transferring money from high-income groups to low-income groups as it can discourage individuals from working harder or seeking better employment opportunities.

Which Is a Moral Hazard Associated with Transferring Money from High-Income