EBK ECONOMICS TODAY
18th Edition
ISBN: 9780133920116
Author: Miller
Publisher: YUZU
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Chapter 13, Problem 2CTQ
To determine
If the assessment of the social security payroll taxes on workers and payment of benefit to recipients tend to reduce the U.S saving rates, could real
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Students have asked these similar questions
Suppose the United States moved from the current pay-as-you-go Social Security system to a fully funded one and financed the transition without additional
government borrowing.
How would the shift to a fully funded system affect the level and the rate of growth of output per worker in the long run?
This will
the saving rate.
In the long run, it will lead to a
level of output per worker and
the growth rate of output per worker.
A. increase; higher; have no effect on
B. decrease; higher; have no effect on
C. increase; higher; increase
○ D. decrease; lower; decrease
Classify each of the following based on the macroeconomic definitions of saving and investment.
Assume that a country experiences a permanent increase in its saving rate. Which of the following will occur as a result of this increase in the saving rate?
Chapter 13 Solutions
EBK ECONOMICS TODAY
Ch. 13.D - Prob. 1PCh. 13.D - Prob. 2PCh. 13.D - Prob. 3PCh. 13 - Prob. 13.1LOCh. 13 - Prob. 13.2LOCh. 13 - Prob. 13.3LOCh. 13 - Prob. 13.4LOCh. 13 - Prob. aFCTCh. 13 - Prob. bFCTCh. 13 - Prob. 1CTQ
Ch. 13 - Prob. 2CTQCh. 13 - Prob. 1FCTCh. 13 - Prob. 2FCTCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prob. 10PCh. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16P
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Similar questions
- Suppose the people in a certain economy decide to stop saving and instead use all their income for consumption. They do nothing to add to their stock of human or physical capital. Discuss the prospects for growth of such an economy.arrow_forwardWhy is there a trade-off between the amount of consumption that people can enjoy today and the amount of consumption that they can enjoy in the future? Why can’t people enjoy more of both? How does saving relate to investment and thus to economic growth? What role do banks and other fifinancial institutions play in aiding the growth process?arrow_forwardSuppose the savings rate suddenly decreases. We can assume that real growth will _____ in the short-run and the steady-state of capital will _____ increase or decrease?arrow_forward
- China currently (2016) has a household saving rate of about 36 %. It has never been below 27 % in the last 30 years. What role do you think this high saving rate has for China’s economic success?arrow_forward“The Sollow model shows that the saving rate does not affect the growth rate in the long-run, so we should stop worrying about the low US saving rate. Increasing the saving rate wouldn’t have any important effects on the economy.” Explain why you agree or disagree with this statement. Structured response required.arrow_forwardWhen one person saves more, that person’s wealth is increased, meaning that he or she can consume more in the future. But when everyone saves more, everyone’s income falls, meaning that everyone must consume less today. Explain this seeming contradiction.arrow_forward
- What would happen to the amount of economic investment made today if firms expect the future returns to such investment to be very low?arrow_forwardPolicymakers trying to promote economic growth must confront the issue of what kinds of capital the economy needs most. If policymakers decide to rely on the marketplace to allocate the pool of saving to alternative types of investment, Those industries with the kinds of capital that yield the lowest marginal product will borrow the most. Those industries with the kinds of capital that yield the highest marginal product will borrow the least. All industries will have incentives to borrow more. Those industries with the kinds of capital that yield the highest marginal product will borrow the most.arrow_forwardIf GDP is $20 trillion, how many years will it take for GDP to increase to $160 trillion if annual growth is 10 percent?arrow_forward
- Suppose that the production function for an economy is given by Y = K1/4L3/4. The depreciation rate is 4%, the saving rate is 12%, Explain how the economy goes from one steady state to another.arrow_forwardIn the very long run, what are the major factors that are responsible for growth in potential output or GDP? Use the production function to support your answer.arrow_forwardWhich of the following is an example of economic investment? ABC Corporation buys an a run-down farm from XYZ Corporation. XYZ Cement Corporation buys a new truck that increases delivery to customers. Michael Daily buys shares of stock in Intel Corporation. Carlos Montana buys U.S. savings bonds.arrow_forward
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