1) What is meant by the term “social insurance”. Give an example of a social
insurance program.
Social insurance is a contribution program that provides insurance against various
risks such loss of life, unemployment, sickness or old age. Participation in social
insurance is often compulsory in many countries. An example of social insurance
is the U.S Medicare program.
2) What is the goal of expansionary monetary policy and how does it work in the
short run?
Expansionary monetary policies are policies initiated by central banks to increase
money supply. Such policies include open market purchases of government bonds
or a reduction in the rate of interests. In the short run, if real GDP and price level
