Question on: JAMB Economics - 1995
Which of the following is the cheapest for the government in improving the welfare of its citizens?
A
Subsidy
B
Income supplement
C
Donation to specific projects
D
Wages increase
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Correct Option: C
Subsidies are generally the most cost-effective way for a government to improve citizen welfare among the options provided. Here's why:
- Subsidy: Subsidies reduce the cost of goods and services, making them more affordable for a larger portion of the population. This can lead to an immediate improvement in welfare, especially for essential items.
- Income Supplement: Income supplements directly provide money to individuals, which can be helpful but are more expensive because they involve direct cash transfers, and it can be difficult to target effectively to those who need it most.
- Donation to Specific Projects: Donations are focused on specific projects, but they don't have the broad impact of subsidies. While helpful, they are not as wide reaching.
- Wages Increase: Government-mand
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