Explain the difference between a pension fund that is a defined-contribution plan from one that is a defined-benefit.
What will be an ideal response?
A defined benefit plan has the participant receiving a lifetime retirement income that is determined by their final salary and years of service. This makes it difficult for many people to earn a high retirement income if they have not worked for the firm or the same firm for a very long time. Under a defined contribution plan both the employer and employee make contributions into an account that belongs to the employee. The employer in a DC plan, unlike a DB plan, takes no responsibility for the size of the employee's retirement income.
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
The single source of monopolies is economies of scale.
Answer the following statement true (T) or false (F)
Refer to Figure 6.8. If your city imposes a tax of $100 per apartment:
A. consumers take the entire burden of the tax. B. landlords take the entire burden of the tax. C. consumers pay $60 and landlords pay $40 tax per apartment. D. consumers pay $40 and landlords pay $60 tax per apartment.
A good or service that is forgone by choosing one alternative over another is called a (an):
a. explicit cost. b. opportunity cost. c. historical cost. d. accounting cost.