Explain what is happening to spending on Social Security and Medicare as the U.S. population continues to age. Why might this spending change pose problems for the U.S. economy?
What will be an ideal response?
Spending on programs such as Social Security and Medicare has increased from less than 3% of GDP in 1960 to more than 10% of GDP today, and is expected to grow to nearly 20% by 2050. Since most of the money for these programs comes from taxes paid by people currently working, as the population ages, there are fewer workers paying taxes relative to the number of people receiving these payments. This results in a funding crisis that can be solved only by either reducing these government payments, reducing expenditure on other programs, or raising the taxes paid by current workers.
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In the income-expenditure model, for each price level there is a different equilibrium output level. If we plot one such equilibrium output and price combination, we obtain
A) a point on the aggregate demand curve. B) the slope of the planned expenditures line. C) the slope of the entire aggregate demand curve. D) the aggregate demand curve.
Commercial airlines have two primary suppliers of large jet aircraft: Boeing and Airbus
Since millions of people fly with commercial airlines each year, should these aircraft manufacturers be required to incorporate every possible safety feature into the aircraft they manufacture? Should the manufacturers be allowed to incorporate no safety features? If some safety considerations are to be required, how would an economist decide on which features to include and which not to include?
When a rational consumer has stopped buying, she or he will have allocated a limited budget so that the marginal utility per good will be the same.
Answer the following statement true (T) or false (F)
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. For this economy to move from Point B to Point C so that an additional 20 OLED televisions could be produced, production of LCD televisions would have to be reduced by
A. more than 30. B. exactly 60. C. fewer than 30. D. exactly 30.