What options have been suggested for shoring up the finances of Social Security and Medicare? Why are they unpleasant ones to consider?
What will be an ideal response?
The options are quite simple but unpleasant. Either benefits must be reduced or revenues increased. To bring the Social Security program into balance over the next 75 years would require a 16-percent permanent reduction in benefits and a 13-percent permanent increase in tax revenue. To bring the Medicare program into long-run balance would require an increase in Medicare taxes by 122 percent and a 51-percent reduction in payments. The option for reducing benefits could involve such policies as increasing the retirement age or disqualifying wealthy individuals from receiving program benefits. The options for raising revenue involve increasing payroll taxes. None of these options are likely to have much political support and will be subject to strong criticism.
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In 1979, the price of gasoline was $1.389 per gallon and the CPI was 72.6. In 2003, the price of gasoline was $1.589 per gallon and the CPI was 182.9. Find the real price of gasoline in 1979 and 2003 in terms of base period dollars
What will be an ideal response?
The demand curve is:
A. a downward-sloping line that reflects the inverse relationship between price and quantity. B. an upward-sloping line that reflects the inverse relationship between price and quantity. C. a downward-sloping line that reflects the positive relationship between price and quantity. D. an upward-sloping line that reflects the direct relationship between price and quantity.
An example of frictional unemployment is a(n):
a. textile worker permanently laid off due to jobs lost to imports. b. engineer permanently laid off due to advances in technology. c. fast-food restaurant worker who quits work and attends college. d. computer programmer who leaves one job and accepts a new job.
Where would a country such as Japan get U.S. dollars in order to engage in managed float?
a. It would print them. b. It would use its reserve of dollars. c. It would sell yen on the open market in exchange for U.S. dollars. d. Since Japan's currency is the yen, it would not be able to obtain U.S. dollars. e. It would borrow U.S. dollars form the U.S.