The major economic effect of Medicare subsidies is
A) that the number of physicians has decreased since compensation is low.
B) to increase the price of medical services and reduce the quantity demanded.
C) to increase the price of medical services and increase the quantity demanded.
D) to lower the price of medical services and reduce the quantity demanded.

Question

Quizplus · Accepted Answer

Medicare subsidies increase the demand for medical services by making them more affordable to a larger portion of the population. This increased demand can lead to higher prices for medical services, as providers may raise prices due to the increased demand. Additionally, the quantity of medical services demanded increases because more people can afford care with the help of the subsidies.

The Major Economic Effect of Medicare Subsidies Is