EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 31, Problem 12DQ
To determine
Social security and Medicare.
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Students have asked these similar questions
What is the tax rate percentage and what is it applied to in order to fund and pay for
Medicare?
O 2.9 percent on wages
5.8 percent on real estate sales
1.5 percent on inheritances for estates valued at more than $15,000.
8 percent on elective surgeries and medical tourism.
The figure shows government expenditure and revenue as a percentage of GDP, 1990-2019. During
which of the following periods did the federal government run a budget surplus?
27.0%
25.0%
-Expenditures
23.0%
21.0%
19.0%
Receipts
17.0%
15.0%
YEAR
O 1998-2001
None of these answers is correct.
O 2003-2008
2012-2018
PERCENT OF GDP
0661
1991
1993
1994
9661
2661
6661
0007
2002
2003
2005
9007
2008
6007
2011
2012
2014
2015
2017
2018
9. Why do Social Security and Medicare pose problems for the federal government budget?
The number of workers who can pay for the retirees is increasing.
O Payroll taxes are capped and cannot be raised.
O The number of retirees is decreasing.
The number of sick people is rising too quickly.
O Life expectancy of retirees is increasing.
10. Why do Social Security and Medicare pose problems for the federal government budget?
The number of people retiring is increasing.
The number of workers who can pay for these retirees is increasing.
Life expectancy is decreasing.
The number of sick people is rising too quickly.
Social insurance taxes cannot legally be raised any further.
Chapter 31 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
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- What do economists mean when they say Social Security and Medicare are “pay-as-you-go” plans? What are the Social Security and Medicare trust funds, and how long will they have money left in them? What is the key long-run problem of both Social Security and Medicare? To fix the problem, do you favor increasing taxes or do you prefer reducing benefits? Why?arrow_forwardSuppose George made $20,000 last year and that he lives in the country of Harmony. The way Harmony levies income taxes, all citizens must pay 10 percent in taxes on their first $10,000 in earnings and then 50 percent in taxes on anything else they might earn. Given that George earned $20,000 last year, his marginal tax rate on the last dollar he earns will be rate for his entire income will be and his average tax O 10 percent; 50 percent O 50 percent; less than 50 percent O 10 percent; less than 50 percent O 50 percent; 50 percentarrow_forwardEconomics Below is a tax table. Assume I earn $150 a year. My tax bracket is my marginal tax rate is I pay in taxes. my average tax rate is ; and O to $100 is 10% $101 to $200 is 15% $201 to $300 is 20% O 10%; 15%; 13.5%; $17.50 O 15%; 15%; 11.7%; $17.50 O none of these O 15%; 15%; 12.5%; $13.50arrow_forward
- If the poverty guideline for a family of four is $25,750, what is the income deficit if household income is $16,500? O $42,250 O $16,500 O $25,750 O $9,250 Unit 7- Chapter 1..xlsx 0Unit 7 Chapter 1..xlsx O Topic 2 (2).docx OTopic 2 (1).docx 11:07 PM 73°F "prt sc delete f12 Sus pua LL 10 144 61 I01 num -> backspace lock enter H. pause * shift W || N ctrl altarrow_forward8 What is meant by the tax subsidy of employer-paid health insurance? Explain why the subsidy very likely increases health care spending and thus the cost of such insurance. Give an example as to why a $5,000 health insurance benefit provides a greater mon- etary benefit to someone in the 33 percent marginal tax bracket than someone in the 15 percent marginal tax bracket.arrow_forwardSuppose that the for every 10% increase in the price of gasoline, consumers will decrease the quantity demanded by 1%, and suppliers will increase their supply of gasoline by 9%. Next, suppose that there is a $0.50 per gallon tax on gasoline, and after the tax quantity exchanged in the market is 15 billion gallons of gasoline. Given this information, what is the total government revenue from the tax? What is the consumer and producer tax incidence (how much of the tax revenue would have come from consumers, and how much from suppliers)? Search entries or author Reply. Unread ↓ 5 5 Replies are only visible to those who have posted at least one reply.arrow_forward
- 1. A middle-income worker with a dependent spouse older than the normal retirement age retired in January 2004. In the year prior to retirement, her gross monthly earnings are $1,500. Her Social Security pension benefit is $1,000 per month. Prior to retirement, she was subject to total taxes on her labor earnings amounting to 20 percent. Calculate her gross and net replacement rates. Suppose the cash value of Medicare subsidies that she expects to receive during retirement amount to $2,000 per year. Recalculate the replacement rates, including the Medicare benefits.arrow_forwardWhat do economist mean when they say Social Security and Medicare are “pay as you go “plans? What are the Social Security and Medicare trust funds, and how long will they have money left in them? What is the key long-run problem of both Social Security and Medicare?arrow_forward4 l 51% a 12:02 O Worksheet (25%) Suppose that the governrnent irmposes a tax oni cigarettes. Use the diagram below to answer the questions D is the demand curve before tax S is the supply curve before tax and S is the supply curve after the tax. Price 18 12 10 10 12 Qua (a) For the market for cigarettes without the tax indicate: () Price paid by consumers (1i) Price paid by producers () Quantity of cigarettes sold (iv) Buyer's reservation pricearrow_forward
- What is the benefit of having state and local taxes on income instead of collecting all such taxes at the federal level? What is the local tax in your county/city? Make sure to state the county/city and the tax rate. How does this compared to the tax rate of neighboring counties/cities? How do you feel about this? Does the location with the higher tax rate receive better amenities (schools, police, road conditions? Would you rather pay a higher tax for better service?arrow_forwardSuppose that a family's income is exactly the same as the poverty threshold. This family's income deficit would be and their ratio of income to poverty would be O 0; 1 0 ; 0 1;0 O 1;1 Consider a family of four in 2008, whose poverty threshold is $22,024. If this family's total income was $12394, what would their income deficit be? income deficit: $arrow_forwardSuppose in Fiscalville there is no tax on the first $10,000 of income, but a 20 percent tax on earnings between $10,001 and $20,000 and a 30 percent tax on income between $20,001 and $30,000. Any income above $30,000 is taxed at 40 percent. If your income is $50,000, how much will you pay in taxesarrow_forward
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