Practice Problems

  1. Before the enactment of Medicare and Medicaid, the HC industry share in the GDP was only
    a. 5 – 10%
    b. 11-15%
    c. 16 – 20%
    d. 21-25%
  2. One of the largest components of HC spending is hospital care
    a. True
    b. False
  3. Which of the following statements is correct?
    a. Medicare covers primarily the indigent population, while Medicaid covers the elderly.
    b. The growth rate of HC expenditures has been very stable from year to year historically.
    c. Inflation is a year-to-year change in prices in the economy
    d. All of the above is correct
  4. In the 1980s, the annual growth rate of HC expenditures finally started to decline
    a. True
    b. False
  5. Which of the following statements is false?
    The consequences of the high and rising healthcare expenditures in the US can be viewed as:
    a) quite positive, since this is one of the very few sectors in the economy that still keeps growing and
    still creates new jobs, even when the entire economy may be in a recession
    b) quite negative, since it drains resources from all others sectors of the economy
    c) affecting economy in various ways: both positive and negative
    d) just a fact of life: there is nothing that can be done about it, and there is no need for the society /
    government to do anything to reverse this trend, since government interference will further increase
    administrative costs in health care
  6. Which of the following factors does NOT contribute to the high and rising healthcare costs in
    the US?
    a. Advances in medical technology
    b. Tax subsidies for health insurance
    c. Enactment of Medicare and Medicaid
    d. High cost sharing for enrollees in private health insurance plans

Sample Solution