Recall the Application About How Society Will Cope with Increased

question 11

Multiple Choice

Recall the Application about how society will cope with increased demands for entitlement programs to answer the following question(s) . This Application addresses the impact of increasing life expectancy and aging populations on the costs of government entitlement programs such as Social Security, Medicare and Medicaid, and examines several possible solutions to the potential problem.
-According to this Application, one solution proposed to deal with the rising expenses of government entitlement programs is to raise taxes. An increase in taxes to help cover the rising expenses of entitlement programs would

• A) increase aggregate demand, shifting the AD curve to the right.
• B) increase aggregate demand, shifting the AD curve to the left.
• C) decrease aggregate demand, shifting the AD curve to the right.
• D) decrease aggregate demand, shifting the AD curve to the left.

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Definitions:

GAAP

Stands for Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction, including the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements.

Compensated Absences

Employee benefits representing paid time off, such as vacation, sickness, or personal leave, accrued by employees.

Vacation Pay

A benefit offered by employers that compensates employees while they are on leave from work for a vacation.

FICA Taxes

Taxes imposed by the Federal Insurance Contributions Act, which fund both Social Security and Medicare, requiring contributions from both employees and employers.