When economists say Social Security and Medicare are pay as you go plans they mean?
When economists say Social Security and Medicare are "pay-as-you-go" plans, they mean. current Social Security retirees have to pay some of these costs themselves. most of the current revenues from the Social Security tax are paid to current Social Security retirees.
Which of the following is not considered a legitimate concern of a large public debt quizlet?
Which of the following is not considered a legitimate concern of a large public debt? Bankruptcy of the federal government. The U.S. public debt: consists of the historical accumulation of all past federal deficits and surpluses.
Which of the following best describes the built-in stabilizers as they function in the United States?
Which of the following best describes the built-in stabilizers as they function in the United States? Personal and corporate income tax collections automatically rise and transfers and subsidies automatically decline as GDP rises.
When Social Security contributions have exceeded payouts in the past?
When Social Security contributions have exceeded payouts in the past, the excess amounts were used to help finance the Federal government's budget deficits. True. The so-called crowding-out effect refers to government spending crowding out private investment spending.
Which of the following is not an important problem associated with the public debt?
Which of the following is not an important problem associated with the public debt? Interest payments on the debt tend to reduce economic incentives to work and invest. Government borrowing to finance the debt may lead to too much private investment.
Which of the following did not contribute directly to the Great Recession quizlet?
The public debt is the amount of money that: the federal government owes to holders of U.S. securities. Which of the following did not contribute directly to the Great Recession? Bursting of the dot.com stock market bubble.
How can built-in stabilizers be advantageous quizlet?
A major advantage of the built-in or automatic stabilizers is that they: simultaneously stabilize the economy and reduce the absolute size of the public debt. automatically produce surpluses during recessions and deficits during inflations. require no legislative action by Congress to be made effective.
Which tax system has the most built-in stability?
progressive tax systemA progressive tax system would have the most stabilizing effect of the three tax systems and the regressive tax would have the least built-in stability.
What does discretionary fiscal policy refer to?
Discretionary fiscal policy means the government make changes to tax rates and or levels of government spending. For example, cutting VAT in 2009 to provide boost to spending. Expansionary fiscal policy is cutting taxes and/or increasing government spending.
How has the Social Security Act of 1935 changed?
The most recent enacted legislation has provided increased incentives for disabled recipients to return to work, and has repealed the earnings test for recipients above the full retirement age. This paper describes only the major changes to the OASDI program since 1935.
What is Social Security Fund quizlet?
Social Security: A federal program that taxes workers to provide income support to the elderly. Through the Federal Insurance Contributions Act (FICA) tax on their earnings. A person must have worked and paid this payroll tax for 40 quarters (10 years) over their lifetime, and must be age 62 or older.
What are the rules for Social Security?
You can receive Social Security benefits based on your earnings record if you are age 62 or older, or disabled or blind and have enough work credits. Family members who qualify for benefits on your work record do not need work credits.
What is contractionary fiscal policy?
Contractionary fiscal policy is so named because it: involves a contraction of the nation's money supply. necessarily reduces the size of government.
How to find the federal budget deficit?
The federal budget deficit is found by: subtracting government tax revenues plus government borrowing from government spending in a particular year. subtracting government tax revenues from government spending in a particular year.
What will fiscal policy do to the economy?
Despite good intentions, various timing lags will cause fiscal policy to reinforce the business cycle. Fiscal policy will result in alternating budget deficits and surpluses. Politicians will use fiscal policy to cause output, real incomes, and employment to be rising prior to elections.
What is cyclically adjusted budget?
decreasing taxes by $25 billion. The cyclically adjusted budget refers to: the inflationary impact that the automatic stabilizers have in a full-employment economy. that portion of a full-employment GDP that is not consumed in the year it is produced.
Why are deliberate changes in government spending and taxes necessary?
deliberate changes in government spending and taxes to stabilize domestic output, employment, and the price level.
Why do politicians use fiscal policy?
Politicians will use fiscal policy to cause output, real incomes, and employment to be rising prior to elections.
Will Social Security become insolvent?
budget deficits are expected to give way to surpluses by the year 2017. Social Security will become insolvent by 2017. budget deficits are expected to remain large for the next several years. An economist who favors smaller government would recommend: tax cuts during recession and tax increases during inflation.