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Economics (AS & A Level) · May / June 2025 · Paper 32 · Question 10

9708Equity and redistribution of income and wealth

A worker has a low wage. They have little incentive to earn extra income because they will pay more income tax and receive fewer means-tested benefits. What describes this worker's situation?

  1. Aemployment trap
  2. Bliquidity trap
  3. Cpoverty trap
  4. Dunemployment trap

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Correct answer: C. poverty trap

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