If Workers Enroll in a Savings Plan and Are Asked

question 51

Multiple Choice

If workers enroll in a savings plan and are asked to check a box to opt out of it, we are seeing an example of a nudge involving the:

• A) enlightened option.
• B) information option.
• C) default option.
• D) incentive compatibility problem.

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Definitions:

Rich Receive

The concept that wealthier individuals or entities receive a disproportionate amount of financial gains or benefits in an economic system.

Welfare

Government programs designed to assist individuals and families in meeting basic needs, such as food, housing, and healthcare.

Carrot-And-Stick

The carrot-and-stick approach is a motivational technique that combines the promise of reward (carrot) and the threat of punishment (stick) to influence behavior.

Income Redistribution

The transfer of income from some individuals to others by means of a social mechanism such as taxation, charity, welfare, public services, land reform, or monetary policies.