20. How can increased government budget deficits potentially impact currency value? Illustrate the effects using a Foreign Exchange Market diagram and consider the following two scenarios a. The likelihood of government defaulting on its debt obligation is low b. The amount of national debt is very high relative to GDP and is perceived to be unsustainable 21. How can national debt be interpreted as "income transfers " between generations and between nations ? 22. If country A's government runs budget deficits year after year and depends on borrowing from country B to finance the national debt, what would likely happen to the average living standard of country A's future generation compared to that of country B's future generation ? How would whether the debt is used to finance consumption or investment affect your response ? 23. In addition to Social Security , which other government programs started in the Great Depression? 24. How does Keynesian economics differ from Classical economics differ in its argument about the role of the government in the market economy ? 25. How does the "pay -as-you -go\" system that is used to fund U.S. Social Security program work? How is it similar to a "Ponzi scheme"? 26. By law,employees share the burden of the FICA tax evenly with their employers But economic analysis reveals that the sharing of the FICA tax burden may not be evenly split between employees and employers. Explain why. 27. From the perspective of tax incidence, how might the FICA tax contribute to widening income inequality between skilled and unskilled workers ? 28. Understand how to calculate the OASDI tax and the Medicare tax for workers with different income source, employment, and tax filing status. (Tax rate info will be provided on the exam.) a. Bill was a physician and owned a clinic with two other physicians in 2017. Bill made a salary of $220,000 in 2017. Bill also made in that year $5,000 income from investing in stock market. Bill filed single tax return in 2017 and the maximum OASDI earning cap for that year was $127,200 b. Bassel worked for a law firm and made $100,000 in 2018 in salary. He also made $6000 by renting out the upstairs of his house that year. Bassel filed single tax return and the OASDI maximum earning cap for that year was $128,400 c. Jasmine owned a flower shop and made $100,000 in 2017 in profit income . Her husband worked for an architecture firm and made $170,000 in 2017 in salary income .Jasmine and her husband filed joint tax returns and the maximum OASDI earning cap for that year was $127,200 29. What is a regressive tax? How can the OASDI tax be considered as a regressive tax? 30. How is Social Security benefit calculated ? What is the PIA and the AIME ? How are they determined? 31.What are the theoretical and empirical effects of Social Security on labor supply ? 32.What are the theoretical and empirical effects of Social Security on saving decision ? 33. Provide economic arguments in favor for having {or expanding) the Social Security program. 34. Provide economic arguments against having (or expanding} the Social Security program