What are the economic implications of rising health care costs?
What will be an ideal response?
Rising health care expenditures and costs have negative economic effects that include: (1) reduced access and coverage for workers and others; (2) labor market problems in the form of slower wage growth and more use of part-time or temporary workers; and (3) adding to budget demands at all levels of government. The basic problem is that there is an over allocation of resources to health care and less economic efficiency in the use of the nation’s resources.
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Suppose the marginal propensity to consume (MPC) equals 0.80, an increase in autonomous investment of $100 will lead to an increase in real Gross Domestic Product (GDP) by
A) $100. B) $400. C) $500. D) $800.
Which of the following observations is not true of a budget line?
a. It indicates what choices are available to the consumer. b. It is a curve of constant expenditure. c. Its slope reports the market terms on which the consumer can trade one good for another. d. It helps examine the consumer's preferences.