1. Suppose the objective of governement polict is to increase an economy\'s grow
ID: 1187182 • Letter: 1
Question
1. Suppose the objective of governement polict is to increase an economy's growth and raise citizens' standards of living. Explain in this context the roles of retirement, Social Security, and Medicare?
2. Oregon proposed a solution to the health care costs problem that was widely criticized. Under this solution, the state paid only for common medical problems. Special and expensive problems would not be coverd. Using the market for medical care, analyze the oregon plan?
3. Why does the health of the economy affect the number of people living in poverty?
4. If one country is growing at a rate of 3 percent per year and another at a rate of 8 percent per year, how long will it take for each to double? What factors might account for the rate at which nations' standards of living grow?
5. Why must voluntary trade between two countries be mutually beneficial?
6. How would each of the following theories of comparative advantage explain the fact that the United State export computers?
A. Productvity differences
B. Factor abundance
C. Human Skills
D. Product life Cylce
E. Preferences
7. If two countries reach equilibrium in their domestic markets at the same price, what can be said about their export supply and import demand curves and about the international trade equilibrium?
Explanation / Answer
1. Suppose the objective of government policy is to increase an economy's growth and raise citizens' standards of living. Explain in this context the roles of retirement, Social Security, and Medicare?.............................. In order to increase an economy's growth the government usually needs an expansionary fiscal policy which if supported by a matching monetary policy leads to growth. But in order to control the inflation the monetary policy is not eased...Keeping this in mind let us look at the roles of retirement, social security and medicare... Without doubt these things will raise the standards of living but at the same time are crucial for the growth of the economy. Retirements plans on one hand raise the standard of living and may indirectly lead to more consumption by giving more disposable income to the citizens. More consumption means higher growth. SOcial security is again a service that every citizen pays for and it directly adds to the government revenues. Medicare, another service, increasing the standard of living and increasing the growth. So government should usually use these three to standard of living provided the fiscal deficit permits and the govt doesnt need to save to curb the same..........................................................................................................................................................................................................................................................................................
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