Question

The mythical country of Quitar has just established a policy to give very generous in-kind benefits to the nation's poor, currently defined as those earning less than $10,000 a year. Several years later, the poverty rate has not fallen. Why not?

Answer 1

A benefit received other than money is known as in-kind benefits. For example, provision of rations, grains,and other such consumable goods.

The reason why the poverty rate has not fallen in the country inspite of the generous in-kind benefits is because most of the in-kind benefits must have been consumable items such as grains, and rations which could only provide immediate satisfaction to the poor people. These in-kind benefits could not be used as some form of saving or investment which would have made their wealth grow.

Poor people must have gotten relief from hunger and other such disablements until the in-kind benefits lasted. Once those items were exhausted the poor people were left to be in the same condition of poverty as before.