What is the relationship between food stamps and cash transfer payments? When, if ever, are they equivalent? When, if ever, might they diverge?
What will be an ideal response?
ANSWER
Food stamps are equivalent to cash transfer payments in situations where recipients would have spent that much on food anyway had they been given cash. Food stamps are no longer equivalent to cash transfer payments for those individuals who receive more food stamps then they need to meet their food budget. In those situations, individuals are worse off because they would rather have cash to spend on all other goods.
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