Social Security requires workers to contribute to an account that is held in their name at the Treasury and invested in government and highly-rated private sector bonds.
Answer the following statement true (T) or false (F)
False
Social Security taxes are used to pay the benefits of already-retired workers, with the implicit promise that future workers will pay for the benefits of the current generation when the current generation retires. Social Security funds are generally transferred, not invested.
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Since classical economists and monetarists believe that the economy operates at full employment, real GDP, that is, along the vertical segment of aggregate supply:
a. any increase in the money supply can only end up raising the price level. b. any increase in the money supply can only end up lowering the price level. c. any decrease in the money supply can only end up raising the price level. d. changes in the money supply will not affect the price level. e. any increase in the money supply will cause both nominal and real GDP to increase.
The principle of comparative advantage asserts that
a. not all countries can benefit from trade with other countries. b. the world price of a good will prevail in all countries, regardless of whether those countries allow international trade in that good. c. countries can become better off by exporting goods, but they cannot become better off by importing goods. d. countries can become better off by specializing in what they do best.
A behavioral economist attempts to convince a group of people to choose one option over another by rewording the language of the option she prefers so it emphasizes benefits rather than costs. This economist is engaging in ______.
a. positive framing b. negative framing c. positive compartmentalizing d. negative compartmentalizing
Economies of scale refer to the
A. Reduction in minimum average costs due to an increase in the number of workers hired. B. Reduction in minimum average costs due to an increase in plant size. C. Downward-sloping portion of the average total cost curve. D. Downward-sloping portion of the marginal cost curve.