(a) Describe how efficiency and equity are compromised when a poverty reduction policy is implemented. (5 marks)

(b) News outlets in Singapore have recently discussed the possibility of governments financially rescuing Singapore Airlines, in the event of a prolonged Covid-19 pandemic. ( https://www.reuters.com/article/us-health-coronavirus-airlines-idUSKBN21D3UWLinks to an external site. )

Why is the government bailing out Singapore Airlines or even just giving them a cheap loan? a) What are the main reasons for the government to intervene? (5 marks)

Answer rating: 100% (QA)

a When a poverty reduction policy is implemented efficiency and equity can be compromised in the following ways Efficiency 1 Misallocation of resource... View the full answer