Forecasts by the Congressional Budget Office show spending on Social Security, Medicare, and Medicaid rising from 10
1 percent of GDP in 2015 to ________ percent of GDP in 2090, and by 2090 the federal government will be spending, as a fraction of GDP, ________ on these three programs as it currently spends on all programs combined.
A) 16.2 percent; half as much B) 19.8 percent; nearly as much
C) 16.2 percent; nearly as much D) 19.8 percent; half as much
B
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Suppose you were a forecaster of the real wage rate, employment, output, the real interest rate, consumption, investment, and the price level. A shock hits the economy, which you think is a temporary adverse supply shock
(a) What are your forecasts for each of the variables listed above (rise, fall, and no change)? (b) What if the shock was really due to people's reduced expectations about their future income. Which variables did you forecast correctly, and which did you forecast incorrectly?
If all firms had to bear all the social costs of their actions, we should observe marginal cost curves
A) of all firms shifting up. B) of some firms shifting up, of some others shifting down, and of the rest not shifting at all. C) of all firms that had generated externalities shifting up while there would be no change for the rest of the firms. D) of some firms shifting up and of the rest shifting down.
A price ceiling set below the equilibrium price causes a shortage in the market
a. True b. False Indicate whether the statement is true or false
Economists object to monopolies on the grounds that monopolies:
a. can fix prices at levels that are too high. b. lack productive efficiency. c. lack allocative efficiency. d. can only exist hypothetically.