Under-investment in health costs lives and money

http://www2.irna.ir/en/news/view/menu-239/0705165393150433.htm

The article discusses the lack of government spending upon health care services for midst of Asia-Pacific countries. Many lives that could be easily saved are thrown away in some of these countries due to a lack of basic health care. The article also claims that government spending on health care is in fact an investment instead of an expenditure. Infact, it is the best investments a country can make. The level of "investment" on health care determines the level of development a country have.
I find the arguement about government spending on health care extremely interesting. After all, better health care will lead to better health for the citizens of the country. This will lead to a better quality in the over all labour force, the major source of resource. As both government expenditure and both government investment are determinants of GDP, it is quite hard to determine whether the increase in GDP is caused by an "investment" or expenditure. However in the long run, better health care services I think does play a major role in changing the quality of the entire labour force. Thus should be considered as an investment.

Chapter 12 key question 7, 10

7. The full-employment budget measures what the Federal surplus would be if the economy reached full-employment level of GDP with existing taxing and spending policies. If the full-employment budget is balanced, then the government is in neither expansionary nor contractionary policy. The budget is the surplus results when revenues and expenditures occur over a year if the economy is not at full-employment. Figure 12-3 shows that if full-employment GDP level was GDP3, then the full-employment budget is contractionary because there would be a surplus. Even though the budget has no deficit at GDP2, fiscal policy is contractionary. Government should cut tax or increase spending to move the economy to full-employment, to raise G or lower T line, or a combination of both until GDP3.

10. dont get this one

Chapter 12 key question 2, 3

2: Multiplier = 1/(1-MPC)= 1/0.2= 5 - government spending = $5 billion
80% Tax Cut = 5 Billion, Tax Cut = 6.25 Billion
The difference between tax cut and gov spending is because not all of the tax cut is spend, some is saved.
Possible Combination - 5 billion tax cut and 1 billion increase in gov. spending

3: 1) reduce government spending 2) increase taxes
The person who wants to preserve the size of the government may go for option 2 because that will get gov more money while the person who thinks the public sector is too large might go for option 1 so as to "waste" some of gov's money.

May 7th hwk

1. I think both arguements combined caused the high unemployments in Europe. For deficient aggregate demand, high government fundings and high interest rate may have been the cause. As for high natural rates, i think it is also an essential cause since the high government social benefits decreased the incentive to be employed and thus, the natural rate of unemployment is high. So both arguements combined caused the essential high natural unemployment rate.

2. During this time period, US was experience an extreme case of GDP growth with GDP growing much faster than employment rate. At that time, the industries must have been experiencing revolutions where technology and things as such updates with faster speed than ever, thus US was able to still maintain a low inflation rate at the time. What stopped this may very likely be the case of 911 or a natural reccession due to the nature of business cycles.