1. In the United States and in most European countries, aging populations and declining birthrates threaten public finances. As the population ages, there are fewer workers paying taxes relative to the number of retired people receiving government benefits. Which of the following government policies would NOT help reduce the pressure on public finances? (Points : 1)
offer financial incentives to increase the birthrate
reduce taxes paid by current workers so that they an save for their future
reduce retiree benefit payments
raise the retirement age

2. In the first six months of 2003, branches of Commerce Bank in New York City were robbed 14 times. The New York City Police recommended steps the bank could take to deter robberies, including the installation of plastic barriers called “bandit barriers.” The police were surprised the bank did not take their advice. According to a deputy commissioner of police, “Commerce does very little of what we recommend. They’ve told our detectives they have no interest in ever putting in the barriers.”

It would seem that Commerce bank would have a strong incentive to install “bandit barriers” to deter robberies. Why wouldn’t they do it? (Points : 1)
The banks would rather delay installation of any theft deterring equipment in anticipation of new lower cost innovations in the security devices market.
The banks must have weighed the cost of installing bandit barriers against the benefits and decided that they have “no interest in ever putting in the barriers”.
The banks are concerned that “bandit barriers” would send the wrong message to customers — that the bank is unsafe.
The banks probably resent any interference from the police department.


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