Much of the U.S. government’s budget is tied to the Consumer Price Index (CPI), including Social Security benefits. Assume that the Social Security Administration (SSA) pays $980 million in benefits this year. If the CPI overstates inflation by 1 percent, how much money does the SSA stand to lose due to overpayments the following year?
a. $98,000
b. $980,000
c. $9.8 million
d. $98 million
c. $9.8 million
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We say that a countrycompletely specializes in production when it spends all of its resources producing:
A. a particular good. B. those goods it has an absolute advantage in producing. C. only what other countries need. D. what it can make more of than anyone else.
In a large open economy, what is the source of the demand for loanable funds?
A. Net foreign investment and investment B. National saving and investment C. Investment D. Net foreign investment
According to the law of increasing costs, as a textile company spends more money to eliminate dust particles from the workplace to increase worker safety
A. the cost of reducing 70 percent of the dust in the factory will be the same as the cost of reducing the first 50 percent of the dust in the factory. B. the cost of reducing 70 percent of the dust in the factory will be less than the cost of reducing the first 50 percent of the dust in the factory. C. the cost of reducing 70 percent of the dust in the factory will be greater than the cost of reducing the first 50 percent of the dust in the factory.
Which of the following is not a final good or service?
A. A computer purchased by a local middle school. B. A refrigerator purchased by a home owner. C. Paper purchased by a textbook company. D. A flu shot purchased by a teacher.