What does the term “cliff effect” mean?

Question

BlackTom AI · Accepted Answer

To tackle this question, I’ll examine what the term 'cliff effect' refers to and then assess each answer choice in light of that concept.
Option 1: 'The need for bolstered food assistance programs.' While advocacy for stronger programs may be related to SNAP conversations, this statement describes a policy goal rather than the specific phenomenon known as the cliff effect. It’s about broad program adequacy, not the sudden loss of benefits as income rises.
Option 2: 'Broad economic difficulties faced by SNAP participants during the pandemic.' This describes general economic hardship in a particular period, which is not the defining mechanism of the cliff effect. The cliff effect concerns how benefits change with income, not overall economic conditions during a pandemic.
Option 3: 'Impact of COVID-related school closures and unemployment.' Similar to Option 2, this focuses on a contextual or causal scenario (COVID impacts) rather than the structural benefit-amount change that defines the cliff effect. It misses the key idea that benefits drop as income increases, creating a cliff rather than a gradual transition.
Option 4: 'A loss of SNAP benefits when one’s income slightly increases.' This captures the precise phenomenon: as earned income increases a little, the SNAP benefit can decrease or disappear due to the program’s benefit calculation and phase-out rules, leading to a disproportionate or abrupt loss of benefits—a classic 'cliff' in the benefit schedule.
In summary, the first three choices describe broader contexts, policy goals, or external factors, but do not name the specific dynamic where a small rise in income triggers a reduction or loss in SNAP benefits. The fourth option distinctly identifies the abrupt benefit reduction that characterizes the cliff effect, reflecting how income thresholds interact with benefit formulas to create that sharp transition.

AS.280.355.01.FA25 Week 9 - Quiz

What does the term “cliff effect” mean?

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