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Chapter 7: Problem 3

How can improvements in health increase a country's total income? How can increases in a country's total income improve health?

Short Answer

Expert verified
Improvements in health can lead to increased total income by boosting productivity as individuals are healthier, require fewer sick days, and are able to work more effectively. A rise in a country's total income can then improve health by allowing more resources to be allocated to medical infrastructure, research, and access to necessities that impact health like food, clean water and better shelter.

Step by step solution

01

Explaining the Influence of Health on Total Income

Begin by explaining how improvements in health can benefit a country economically. One can argue that when the overall health of a population improves, productivity rises as individuals are better able to work and contribute to the economy. It can be explained as fewer sick days, increased working longevity, and improved concentration and strength for physical work, which all contribute to the revenue generated in a country.
02

Provide Real World Example

Substantiate your argument with real world examples showing how improvements in health have led to economic growth. An example could be the eradication of smallpox and polio leading to increased productivity (and subsequently total income) in many parts of the world.
03

Explaining the Influence of Total Income on Health

In this step, explain how increases in a country's total income can lead to health improvements. Allocate more resources to health infrastructure, such as hospitals, clinics, immunization campaigns, and health research. It can also facilitate access to better housing, nutrition, and education, which are all factors that strongly influence a person's health.
04

Provide Real World Example

Conclude by once again providing real world examples such as developed countries with high income per capita having better healthcare infrastructure and overall health indicators than low-income countries.

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Most popular questions from this chapter

What arguments do economists and policymakers who believe that market-based reforms are the key to improving the health care system make in criticizing the ACA?

(Related to Solved Problem 7.4 on page 241 ) In 2017 , an article in the Wall Street Journal discussed trends in the health care sector. The article noted the "adoption of new health information technology," using "advanced algorithms and natural-language processing technologies to read and reformat" data on patients. Assuming that health information technology continues to advance, use a graph of the market for medical services to show the effect. Explain any shifts in the demand curve or supply curve and the effect on the equilibrium price and quantity of medical services.

What is the Patient Protection and Affordable Care Act (ACA)? Briefly list its major provisions.

(Related to the Apply the Concepton page 236) Employees in most circumstances do not pay taxes on the value of the health insurance provided by their employers. If employees were taxed on the value of the employer-provided health insurance, what would you expect to happen to the overall compensation employers pay employees? To the value of health insurance provided by employers? To the wages paid to employees? Briefly explain.

Briefly compare the health care systems in Canada, Japan, and the United Kingdom with the health care system in the United States.
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