Eco 101
Homework Assignment 6 - Solution Key
The due date for this assignment is Thursday April 28.
Instructions: Complete the following questions and turn in your solutions at the
end of the class lecture on the date due. Remember to include your name and
student number on your submitted document.
Question #1 โ Definitions
i. Social Security โ (see page 308)
ii. Entitlement โ(see page 308)
iii. Pay-As-You-Go (PAY-G) Social Security โ(see page 309)
iv. Statutory right โ(see page 310)
v. Contractual Right โ(see page 310)
vi. Individual Equity โ(see page 310)
vii. Social Adequacy โ(see page 310)
viii. Initial Old โ The persons present when the PAY-G system starts. That
is, those of retirement age who immediately start to
receive benefits without having to incur any costs or pay
social security taxes.
ix. Progressive Tax โ(see page 311)
x. Proportional Tax โ (see page 311)
xi. Replacement Rate โ (see page 312)
xii. Adverse Selection โ (see page 316 โ When an individual may choose
to opt out of a program because their expected gain is less than their
expected loss)
xiii. Gross Domestic Product (use the chapter 15 definition) โ (see page
356)
xiv. Recession โ (see page 328)
xv. Labor Force โ (see page 329)
xvi. Labor Force Participation Rate โ (see page 329)
xvii. Unemployed Person โ (see page 331)
xviii. Unemployment Rate โ (see page 331)
xix. Discouraged Worker โ (see page 334)
xx. Frictional Unemployment โ (see page 336)
xxi. Structural Unemployment โ (see page 336)
xxii. Full Employment โ (see page 338)
xxiii. Cyclical Unemployment โ (see page 337)
xxiv. Minimum Wage โ (see page 340)
xxv. Inflation โ (see page 342)
xxvi. Deflation โ (see page 342)
xxvii. Consumer Price Index โ (see page 343)
xxviii. Hyperinflation โ (see page 345)
xxix. Purchasing Power โ (see page 345)
