Advances in medical practice have increased both expected lifespans and medical expenditures. What does the life-cycle hypothesis predict as the macroeconomic consequences?
What will be an ideal response?
An extended lifespan implies more years in retirement. The high cost of medical care implies that those years will, on average, be more expensive. For both reasons, workers will increase saving now (reduce consumption) and accumulate more wealth before retirement.
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Along the Keynesian range of the aggregate supply curve, an increase in the aggregate demand curve will increase:
a. both the price level and real GDP. b. only real GDP. c. only the price level. d. real GDP and reduce the price level.
Cost-push inflation occurs when the:
a. aggregate demand curve shifts leftward while the aggregate supply curve is fixed. b. aggregate supply curve shifts leftward while the aggregate demand curve is fixed. c. aggregate demand curve shifts rightward while the aggregate supply curve is fixed. d. aggregate supply curve shifts rightward.
Economic theory tells us that inequality in income is unfair if differences in opportunity leads to inequality of income.
Answer the following statement true (T) or false (F)
If users can benefit from conservation, resources will be:
A. Not be profitable B. Extracted at a fast rate C. Preserved for future use D. Overused in the present and the future