Question

The federal government subsidizes state spending on welfare, thus changing the effective price to states of welfare spending. According states of welfare spending. According to Baicker [2005], the elasticity of state spending on benefits per recipient is 0.38. Suppose that the federal government matches state welfare spending on a one- for- one basis, and then changes to a two- for- one basis. How would you expect state welfare spending to change?


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  • CreatedMarch 25, 2015
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