In 1990, Senator Moynihan suggested that Social Security receipts and expenditures be taken off-budget so that the Social Security surplus would not be shown as part of the regular budget. He claimed that, under current accounting procedures, the Social Security surplus was masking the true size of the federal deficit. Would his proposal be a good idea?
What will be an ideal response?
Since the Social Security tax receipts and the Social Security Trust Fund are to be used strictly to pay Social Security benefits, the proposal is commendable. Congress, however, was under pressure from the requirements of the Gramm-Rudman-Hollings deficit reduction law and did not support Senator Moynihan’s suggestion. Perhaps when the budget (counting the Social Security surplus) is balanced, the surplus ought to be removed from the equation, as President Bush suggested.
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Certain kinds of tropical fruits are impossible to grow outdoors in the United States. Suppose, however, that in order to create jobs in Wyoming, the U.S. government offered extensive subsidies to firms to produce bananas
With the subsidies, firms could build greenhouses and offer the fruit at world prices. A) The United States now has a comparative advantage in bananas. B) The United States has a comparative advantage, but is not competitive. C) The United States is competitive, but does not have a comparative advantage. D) The United States has a comparative advantage and is competitive. E) None of the above.
In recent years new automobile factories have opened in California and Ohio and closed in Detroit where the unemployment of automobile workers has increased. This unemployment could be decreased if
A) "moving costs" from Detroit to California and Ohio were reduced. B) information about the new jobs was made available to the unemployed workers at reduced cost. C) workers with the appropriate skills were relatively scarce in Ohio and California. D) all of the above.
During the first phase of regulation in the United States (from 1887 to the Great Depression), the primary target of regulation was the:
a. labor unions. b. communication industry. c. food and drug industries. d. railroads.
Which of the following will shift the long-run aggregate supply curve to the right?
a. Increase in the price level b. Increase in the natural rate of unemployment c. Decrease in per capita GDP d. Increase in the rate of economic growth e. Increase in the rate of inflation