If the US Economy Grew Rapidly in the Future, Would This Eliminate

question 167

Multiple Choice

If the U.S. economy grew rapidly in the future, would this eliminate the long run deficit of Social Security?

• A) No; future Social Security benefits are tied to nominal wages and therefore increases in real incomes will also increase the future retirement benefits.
• B) Yes; a rapid real growth rate would increase tax revenues without increasing the real benefit levels of future recipients.
• C) Yes, more rapid growth would lead to inflation and this would help eliminate the system's long run deficit.
• D) Yes, but only if the rapid growth led to a substantial increase in net exports.

---

Definitions:

Equilibrium

A state of balance within a system where forces or influences are equal and opposing, leading to no net change over time.

Trade in Goods

The buying and selling of physical products between countries, regions, or within the same country.

Net Inflow

The total amount of something (such as capital or goods) entering a location minus the amount leaving it.

Services

Intangible activities or benefits that an organization provides to consumers in exchange for money or some other value.