What are the economic implications of rising health care costs?
What will be an ideal response?
Rising health care expenditures and costs have negative economic effects that include: (1) reduced access and coverage for workers and others; (2) labor market problems in the form of slower wage growth and more use of part-time or temporary workers; and (3) adding to budget demands at all levels of government. The basic problem is that there is an over allocation of resources to health care and less economic efficiency in the use of the nation’s resources.
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Studies have shown that
A) firms often cut nominal wages during recessions and allow inflation to gradually increase real wages. B) firms are reluctant to cut nominal wages during recessions but instead increase workers' nominal wages and allow inflation to gradually increase real wages. C) firms are reluctant to cut nominal wages during recessions but instead freeze workers' nominal wages and allow inflation to gradually reduce real wages. D) firms often freeze workers' nominal wages during a recession and keep the wages frozen well after the recession has ended.
If a factor of production has many close substitutes, we would expect that its price elasticity of demand would be:
A. Unity B. Zero C. Greater than one D. Less than one, but greater than zero
Arbitrage in the foreign exchange market, international loans markets, and goods markets results in
A) purchasing power parity, interest rate parity and law of one price. B) purchasing power parity, interest rate parity and price parity. C) purchasing power parity, interest rate parity and round-trip profit. D) purchasing power parity, price parity and no round-trip profit.
Making the distribution of wealth ________ equal is ________
A) more; differences in degrees of specialization B) less; differences in degrees of specialization C) more; assortative mating D) less; assortative mating