Our ability to manage Social Security as a "pay-as-you-go" program (in which taxes collected from those currently working are used to make benefits payments to those currently retired) is impaired when the number of retirees per worker increases. The current concern about the stability of Social Security is based primarily on projections that there will many more retirees per worker when the baby boomers begin to retire. Then, if we want to maintain a pay-as-you-go system, we can:
A. raise benefits to compensate for the increase in the number of retirees per worker.
B. reduce benefits to compensate for the increase in the number of retirees per worker.
C. reduce benefits to compensate for the decrease in the number of retirees per worker.
D. maintain current benefit levels with no changes to how Social Security is financed.
Answer: B
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A Lorenz curve that represents an unequal income distribution is
A) a straight line starting at the origin. B) a straight line starting at 100% C) a bowed curved. D) a line that has a kink in the middle of it.
The slope of the budget constraint line is:
a. the ratio of the prices (px/py). b. the negative of the ratio of the prices (px/py). c. the ratio of income divided by price of y (I/py). d. none of the above.
In the long run, an increase in the money supply growth rate
a. increases inflation and shifts the short-run Phillips curve right. b. increases inflation and shifts the short-run Phillips curve left. c. decreases inflation and shifts the short-run Philips curve right. d. decreases inflation and shifts the short-run Phillips curve left.
________ does not address the questions related to optimal resource allocation.
a. Comparative-effectiveness analysis b. Economic efficiency c. Cost-benefit analysis d. Cost-effectiveness analysis