MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Chapter 7.2, Problem 1GE
To determine
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The Inflation Reduction Act was signed into law in August of 2022. How will this law impact prescription drug prices in 2023 and beyond?
Source:
https://www.kff.org/medicare/issue-brief/explaining-the-prescription-drug-provisions-in-the-inflation-reduction-act/
Read “YOU’RE THE ECONOMIST: Why the High Cost of Health Care?” in Chapter 17. After reading the case, discuss the following questions: (1) Which of the causes of healthcare inflation discussed here could be considered demand-pull causes? Which are elements of cost-push inflation? (2) Can you think of any other causes for the rising costs of health care.
In the last thirty years, US medical care CPI has been
a.
Consistently lower than the overall inflation
b.
Consistently higher than the overall inflation
c.
Constant
d.
Fluctuating around the overall inflation
Chapter 7 Solutions
MACROECONOMICS FOR TODAY
Ch. 7.2 - Prob. 1GECh. 7.2 - Prob. 2GECh. 7.2 - Prob. 1YTECh. 7.2 - Prob. 2YTECh. 7 - Prob. 1SQPCh. 7 - Prob. 2SQPCh. 7 - Prob. 3SQPCh. 7 - Prob. 4SQPCh. 7 - Prob. 5SQPCh. 7 - Prob. 6SQP
Ch. 7 - Prob. 7SQPCh. 7 - Prob. 8SQPCh. 7 - Prob. 9SQPCh. 7 - Prob. 10SQPCh. 7 - Prob. 11SQPCh. 7 - Prob. 1SQCh. 7 - Prob. 2SQCh. 7 - Prob. 3SQCh. 7 - Prob. 4SQCh. 7 - Prob. 5SQCh. 7 - Prob. 6SQCh. 7 - Prob. 7SQCh. 7 - Prob. 8SQCh. 7 - Prob. 9SQCh. 7 - Prob. 10SQCh. 7 - Prob. 11SQCh. 7 - Prob. 12SQCh. 7 - Prob. 13SQCh. 7 - Prob. 14SQCh. 7 - Prob. 15SQCh. 7 - Prob. 16SQCh. 7 - Prob. 17SQCh. 7 - Prob. 18SQCh. 7 - Prob. 19SQCh. 7 - Prob. 20SQ
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- Select Correct and explain Why Social security payments have been adjusted for inflation annually since the late 1970s yet it is sometimes argued that the true cost of living for retirees on social security rises less than the cost of living adjustment used by the government. If this is the case, retirees: are hurt by inflation even with the government's inflation adjustment. are protected from inflation by the government's inflation adjustment. benefit from using the government's cost of living adjustment rather than a more accurate cost of living adjustment. would be better off if the government cost of living adjustment more accurately reflected the true cost of living for retirees.arrow_forwardDefine the term Inflation-free interest rate?arrow_forward4.Total spending on health care in the United States rose from $85 billion in 1977to $2.4 trillion in 2007.a.Find the relative change in health care spending from 1977to 2007.Round your answer to the nearest whole percent.Increase in health care spending: _____________ % b.Find the overall inflation rate from 1977to 2007.Round your answer to the nearest whole percent.Overall inflation rate: _____________ %c.The increase in the cost of health care was about ____ times the overall inflation rate.arrow_forward
- Give at least 2 reasons why "grade inflation" is observed in educationarrow_forwardSuppose you have $100 saved in the bank at an annual saving rate of 5 percent today. Also, the inflation rate is expected to be 7 percent annually over the next few years. What kind of confusion related to inflation would this create? Group of answer choices Blurred price signals Difficulties in long-term planning Unintended redistributions of purchasing power Substitution Biasarrow_forwardWhat are the benefits of inflation indexation in fixed income products? Why is it important for retirees? What is the cost for having inflation indexation as a product feature?arrow_forward
- What are the types of Inflation? Identify the percentage rate of price increase per type.arrow_forwardSuppose all wages, salaries, welfare benefits, and other sources of income were indexed to inflation. Would inflation still be considered a problem? Why or why not?arrow_forwardTrue or False : Inflation is a genuine issue for retirement planning because a person age 65 will on average live between 18 and 20 years and the cost of goods can double over that period of timearrow_forward
- How can we calculate the average general inflation rate from the base period?arrow_forwardSuppose you borrow $1,000 from a bank at a fixed rate of interest (5%) for one year to finance your college education. Explain the redistribution of income that occurs if the rate of inflation that year is 7%. Was this loan advantageous to you or the bank?arrow_forwardIdentify and briefly describe some statistical index to measure the effects of inflation.arrow_forward
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