If Households Ignore Effects on Future Generations When a Pay

question 35

Multiple Choice

If households ignore effects on future generations when a pay as you go social security system starts, the then elderly:

• A)have a positive income effect on their consumption.
• B)receive benefits that in present value is less the present value of their contributions.
• C)receive low returns on any taxes paid into the system.
• D)all of the above.

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Definitions:

Henry Clay

An American statesman and lawyer who served as a pivotal figure in the U.S. politics during the first half of the 19th century, known for his Compromise Measures and as a leading war hawk.

Bonus Bill

Legislation proposed after the War of 1812 to allocate federal funds for the construction of roads and canals, which was vetoed by President Madison in 1817 on constitutional grounds.

Unconstitutional

Something that is not in accordance with the constitution of a country or government, and therefore is considered illegal or void.

Federal Assistance

Refers to financial support provided by the federal government to individuals, organizations, or state and local governments, typically for services, projects, or programs that further public objectives.