From 1960 to 1990, the personal savings rate in the United States was 8 to 10 percent. As family incomes have stagnated, this rate has collapsed and in 2006-for the first time since the Great Depression (when many individuals spent their last nickel for food)-the personal savings rate was negative. When the dire outlook for Social Security is taken into account along with this statistic, an alarming picture of the future of the United States is painted.

Given the status of Social Security/Medicare (discussed in Number Eight), if America is going to have long-term viability, the personal savings rate must move upward to a more realistic positive level-not only to provide for retirement, but also to provide capital for long-term investment [In the U.S. GDP equation, savings equal investmentFrom 1960 to 1990, the personal savings rate in the United States was 8 to 10 percent. As family incomes have stagnated, this rate has collapsed and in 2006-for the first time since the Great Depression (when many individuals spent their last nickel for food)-the personal savings rate was negative. When the dire outlook for Social Security is taken into account along with this statistic, an alarming picture of the future of the United States is painted.

Given the status of Social Security/Medicare (discussed in Number Eight), if America is going to have long-term viability, the personal savings rate must move upward to a more realistic positive level-not only to provide for retirement, but also to provide capital for long-term investment [In the U.S. GDP equation, savings equal investmentFrom 1960 to 1990, the personal savings rate in the United States was 8 to 10 percent. As family incomes have stagnated, this rate has collapsed and in 2006-for the first time since the Great Depression (when many individuals spent their last nickel for food)-the personal savings rate was negative. When the dire outlook for Social Security is taken into account along with this statistic, an alarming picture of the future of the United States is painted.

Given the status of Social Security/Medicare (discussed in Number Eight), if America is going to have long-term viability, the personal savings rate must move upward to a more realistic positive level-not only to provide for retirement, but also to provide capital for long-term investment [In the U.S. GDP equation, savings equal investment

Question 10.

1. The value of an entrepreneurs resources that she uses in production are known as:

2. One of the most important differences between a firms economic profit and its accounting profit is the subtraction of:

3. That profit functions as an incentive for innovation was among the key contributions to economic thought by:

4. Which two of the following are characteristics of the principal-agent problem? a)Ownership and control in hands of same people

b)Ownership and control in hands of different people

c)Shareholders and managers pursue different objectives

d)Shareholders and managers pursue same objectives

e)Sole traders are the dominant form of business organization

5. Economic profit is.......

6. Economic profit is...

7. The principal-agent problem arises when...

8. Discuss the means and give an example of moral hazard

9. . Economic profit is the best measure of a firm's performance because...

10. . Business Economics is also known as _______