A current concern about Social Security is that
A. continued political bickering between the president and Congress could lead to an end to any funding of the program.
B. funds set aside by past generations to pay benefits for future generations are growing too rapidly and may trigger inflation.
C. the payroll taxes used to fund the program are being eliminated as part of an effort to generate employment increases, thus leaving the program bankrupt.
D. promised benefit payouts are growing more rapidly than likely sources of revenues, indicating a future inability to keep the system operating.
Answer: D
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One of the commonly used assumptions in deriving the Heckscher-Ohlin model is that tastes are homothetic, or that if the per capita incomes were the same in two countries, the proportions of their expenditures allocated to each product would be the
same as it is in the other country. Imagine that this assumption is false, and that in fact, the tastes in each country are strongly biased in favor of the product in which it has a comparative advantage. How would this affect the relationship between relative factor abundance between the two countries, and the nature (factor-intensity) of the product each exports? What if the taste bias favored the imported good?
When some firms leave a perfectly competitive market, the price:
A. falls, and profits of those left rise. B. falls, and profits of those left fall. C. increases, and profits of those left rise. D. increases, and profits of those left fall.
Which of the following decreases during recessions?
a. real GDP b. unemployment c. layoffs and consumer spending d. layoffs but not consumer spending
Suppose the demand for good X is given by Qdx = 10 - 2Px + Py + M. The price of good X is $1, the price of good Y is $10, and income is $100. Given these prices and income, how much of good X will be purchased?
A. 115. B. 1,000. C. 515. D. None of the statements associated with this question are correct.