Chapter 16, Problem 1AA

To determine

To evaluate the way government involved in the U.S. economy by the following terms ; public- work projects , Medicare, public goods , income redistribution, social security, workers’ compensation, welfare, supplemental security income, Medicaid, externalities.

Explanation of Solution

Public- work projects; some of the publicly used facilities, like educational institutions and highways, are generally constructed by federal, state , or local governments with public money.

Medicare, The federal government has taken several steps in the Medicare system that is consistent with its buyer position by promoting the publication of comparative quality data in the public domain.

Public goods; Community products usually are not provided by the private sector as they will not be able to produce them for benefit. This is up to the government to determine what production of public goods suits society.

Income redistribution, Income Redistribution is an economic process aimed at equalizing a society's distribution of wealth or income through a direct or indirect transfer of income from the wealthy to the poor.

Social security, The Social Security Administration (SSA) is the organization that regulates and operates the Social Security program in the United States.

Even the SSA is responsible for issuing social security numbers, providing insurance, and overseeing the budgets and trust fund of the system. It publishes a financial report each year.

workers’ compensation, The Federal Employee Compensation Act (FECA) provides protections for workers ' compensation for work-related accidents and occupational illnesses. Benefits include wage reduction, medical insurance allowance, and medical and vocational rehabilitation support when returning to work and survivor benefits where appropriate.

Welfare, The US Government offers financial aid to Needy Families by Temporary Assistance. The Congress was designed to prevent welfare recipients from abusing the welfare system by forcing all applicants to find a job within two years or to risk losing their welfare benefits

supplemental security income, Supplemental Security Income (SSI) is a U.S. funded taxpayer-tested plan that offers cash benefits to U.S. citizens who have worked for social insurance and are eligible for retirement.

Medicaid, The Medicaid Program is collectively administered by the federal and state governments. The federal government pays out states on a fixed amount of program funding, called the Federal Medical Assistance Amount (FMAP).

Externalities: Through offering subsidies for products or services that produce spillover benefits, the Government may play a role in promoting positive externalities. And, as the spillover benefits go to society, government subsidies are a way for society to share the burden of creating positive externalities.

Economics Concept Introduction

Introduction: Governments are responsible for providing infrastructure that people, such as military defence, fire and police forces, highways, healthcare , social care, and environmental protection, can not adequately provide for themselves.