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Account Increase in Country X When discussing the current account of country X, an increase can occur in a few different ways. In order for the current account to increase, there must be a positive difference between the total amount

Answer: Investing in Foreign Stocks and Bonds for Retirement Accounts Investing in foreign stocks and bonds for retirement accounts is a popular way to diversify one’s portfolio. Investing in foreign stocks and bonds can be a great way to increase

Answer: Purchasing Foreign Stocks and Bonds for IUPUI Retirement Accounts It is possible to purchase foreign stocks and bonds for use in an IUPUI retirement account. Investing in foreign stocks and bonds can be a great way to diversify your

Answer Summary Structural unemployment can be reduced by investing in education, job training, and encouraging businesses to invest in labor-saving technology. Investing in Education Investing in education provides individuals with the necessary training to fill positions in the economy. This

What are Discouraged Workers? Discouraged workers are people who are unemployed, but have given up looking for employment and are no longer counted in the official unemployment statistics. Would the Unemployment Rate Rise Weakly or Substantially? If discouraged workers were

What Would Happen if Discouraged Workers Were Counted in US Unemployment Statistics? Discouraged workers are those who have become so discouraged by their job search experience that they have given up looking for employment. If discouraged workers were included in

Answer: What is Discouraged Worker Effects on US Unemployment Statistics? Discouraged worker effects occur when individuals become so discouraged with their job search efforts that they become inactive in the labor market. If discouraged workers were counted in US unemployment

Answer: Are Military Personnel Classified as Participating in the Labor Force? Yes, military personnel are classified as participating in the labor force. This is because the U.S. Bureau of Labor Statistics (BLS) considers them to be employed, and their service

Answer: Does an Increase in Government Budget Deficit Raise the Fiscal Crisis? Government budget deficits are the amount of money the government spends beyond what it collects in taxes and other revenues. When the government spends more than it takes

Does an Increase in the Government Budget Deficit Raise Private Investment? The short answer is yes, an increase in the government budget deficit can raise private investment. This is because the government budget deficit stimulates economic growth and increases national

Answer: Government Budget Deficit and Variables An increase in the government budget deficit will result in an increase in government debt, government spending, and taxes, as well as a decrease in government savings. Government Debt When the government runs a

Answer: Government Spending vs. Tax Revenue Government spending and tax revenue are two of the most important components of fiscal policy. A government’s fiscal policy is the way it manages its spending and taxation, and it can have a significant

Answer No, switching the funding of Social Security away from a pay-as-you-go scheme to a fully funded scheme would not largely be unaffected by the fiscal crisis. This is because the costs associated with funding Social Security would require more

Answer: A fully funded Social Security scheme would mean that instead of current workers paying for the retirement benefits of retired workers, the money paid in Social Security taxes would be put into individual accounts for each worker. This would

Answer: A Fully Funded Social Security System A fully funded Social Security system would mean that instead of taxes being used to cover benefits of current retirees, individuals would be required to make contributions to personal accounts that would help

Answer: Switching the Funding of Social Security from Pay-as-you-go to Fully Funded The idea of switching the funding of Social Security from a pay-as-you-go system to a fully funded system has been proposed in the past. This would involve each

What is Social Security? Social Security is a government program that provides economic security for people who are elderly, disabled, or retired. It is funded through payroll taxes and provides a monthly stipend to those who are eligible. What is

Answer: Does the Government Budget Deficit Cause Low Interest Rates? Yes, the government budget deficit can cause low interest rates. When the government runs a budget deficit, it needs to borrow money to cover the shortfall. This borrowing often comes

What is the Government Budget Deficit? The government budget deficit is the amount of money the government spends beyond the amount of money it collects in taxes. It is the difference between government spending and revenue collected over a certain

Answer: Government Budget Deficit Explained The government budget deficit is when government spending exceeds its revenue (taxes). This means the government has to borrow money to make up the difference. The deficit can be used to fund long-term investments or

Government Budget Deficit The government budget deficit is an economic concept that measures the difference between government spending and revenue in a given period of time. It is the amount of money the government must borrow in order to make

Answer: Firms are responsible for paying a portion of the payroll tax that finances Social Security benefits, which has an effect on both the demand for labor and the wages in the labor market. This payroll tax causes the demand

Answer: Overview of Social Security System Financing Scheme The Social Security system is a program funded by payroll taxes that provides income to retired and disabled individuals and their families. The financing of this system is based on a scheme

Answer: The Federal Reserve (Fed) has the ability to influence nominal interest rates in the short run by increasing or decreasing the growth of the money supply. To lower nominal interest rates in the short run, the Fed can expand

What is an Open Market Purchase? An open market purchase is a type of monetary policy action that involves the Federal Reserve buying Treasury bills, notes, and bonds from banks and other financial institutions in the open market. This increases

Answer: Limiting the Ability of the Fed to Affect Short-Run Economic Growth The Federal Reserve (Fed) is the central banking system of the United States. It is responsible for setting the nation’s monetary policy, and as such, it plays an

Answer Banks concerned about “runs on deposits” will move to raise reserves, causing all of the above: lower interest rates on bank accounts, fewer bank loans, and higher fees charged for banking services. Lower Interest Rates on Bank Accounts When

Answer The correct answer is D – all of the above. When the US increases the supply of dollars, the value of the dollar will fall, the real cost of US goods to foreigners will fall in the short-run, and

Answer Monetary policy can affect both nominal and real exchanges, however the scope depends on the time frame. In the short-run, monetary policy can affect both nominal and real exchanges. In the long-run, monetary policy can only affect nominal exchanges.

Answer: A. Increase, Increase When US demand for Japanese cars increases, the value of the Japanese Yen increases and the real cost of Japanese goods to foreigners will also increase. Supporting Subsection 1 The demand for Japanese cars in the

Answer: What is an Open Economy? An open economy is one that interacts with other economies through international trade and capital flows. This type of economy is characterized by a high level of economic activity and interdependence between countries. An

Answer The correct answer is Option B: A drop in national saving causes a trade surplus and borrowing from foreign countries. Explanation In an open economy, savings are a key part of the trade balance. A drop in national savings

Answer: Purchasing Foreign Stocks and Bonds for Retirement Account The correct answer to this question is option B, which is that purchasing foreign stocks and bonds for an IUPUI retirement account increases the US capital account. This is because when

Military Personnel in the Labor Force The labor force includes the number of people employed in the United States, as well as the number of military personnel. The U.S. Department of Defense defines military personnel as those who are serving

Participating in the Labor Force The labor force is made up of individuals who are employed or actively looking for work. Full-time homemakers, retirees, and military personnel would not be classified as participating in the labor force. Employment Status In

What Causes Someone to be Classified as Unemployed? Unemployment is a measure of those individuals in the labor force who are actively seeking employment but are unable to find work. In order to be classified as unemployed, an individual must

Switching the Funding of Social Security from Pay-as-you-go to Fully Funded The funding of Social Security is a pay-as-you-go scheme, where current workers’ payments fund the benefits of current retirees. This system is not sustainable in the long run, so

Answer Firms are required to pay a portion of the payroll tax that finances Social Security benefits, which causes the demand for labor to shift and market wages to decrease. By law, employers and employees both pay a 6.2 percent

Big Business and Corporate Profit Tax Government tax revenue can come from a variety of sources, but corporate profit tax is one of the largest contributors. Big business is responsible for a significant fraction of the government’s tax revenue through

Answer Corporate profit tax is one of the major sources of revenue for governments, accounting for about 10% of total tax revenue in the United States and around 12% of total tax revenue in the United Kingdom. In other countries,