Question
1. which of the following explains the increase in the earnings gap between high skilled and low skilled workers? select two

2. Temporary assistance for needy families (TANF) attempts to avoid _ by requiring that welfare recipients work and by limiting the length of time they can receive benefits.

- 3 days Question 1 Which of the following explains the increase in the earnings gap between high-skilled and low-skilled wor
Question 2 by requiring that welfare recipients work Temporary Assistance for Needy Families (TANF) attempts to avoid the and
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Answer #1

Answer 1.

• the demand for high skill labor has been rising faster than the supply of high-skilled labor

• the demand for low-skill labor has been rising slower than the supply of low skilled labor

Reason- Demand for high skill labor has risen faster than supply leading to rise in wage.

But demand for low skill labor has risen slower than supply leading to fall in wages.

Both these factors combined leads to rise in income inequality.

Answer 2. Poverty trap

Reason- Poverty trap is a spiral mechanism whoch forces poor people to remain poor. TANF provides assistant which when combined with their own earnings helps poor to get out of the trap.

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