c. Real GDP = \$ 300 B, Potential GDP $Y_p$ = \$200B, MPC = 0.8. 9. How would the following events increase or decrease the current public debt and implicit liabilities of the U.S. government? a. Medicare Part D offers seniors a prescription drug benefit. b. The retirement age for full Social Security benefits is raised to 70 years old. c. Social Security benefits for future retirees are limited to those seniors with low incomes. d. Because the cost of health care is increasing faster than the overall inflation rate, annual increases in Social Security benefits are increased by the annual increase in health care costs rather than the overall inflation rate.
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Medicare Part D offers seniors a prescription drug benefit. This policy would likely increase the aggregate demand in the economy as it provides seniors with additional income to spend on prescription drugs. This increase in aggregate demand would lead to an Show more…
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