New classical economists advocate reducing welfare payments to people who are unemployed or single parents. The economic reasoning used was that this would ?
Correct answer: B. reduce unemployment
- A. reduce poverty
- B. reduce unemployment
- C. weaken the power of trade unions
- D. help small businesses
Explanation
New classical reasoning emphasizes work incentives: generous welfare benefits can reduce the cost of remaining unemployed or out of work, so cutting them is expected to encourage job-seeking and reduce unemployment. It is not primarily aimed at reducing poverty.
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