The System of Social Security Is Based on Young Working

question 18

Multiple Choice

The system of Social Security is based on young working people paying taxes to support older retired people.The dependency ratio is the number of workers to retirees.Forty years ago it was 16 workers for every one retiree.What will happen to this ratio by the year 2048?

• A)It will reverse so that there will be more retirees than workers.
• B)It will increase,because there will be more young workers than retirees.
• C)It will decline to 2 workers for every 1 retiree.
• D)Nothing,since the ratio of young people to old people does not change.

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Definitions:

Quarterly Withdrawals

Withdrawals made from an account or investment every three months.

Investment Earning

The profit generated from investing capital in financial assets, such as stocks, bonds, or real estate.

Compounded Annually

Interest calculation method where interest is added to the principal once a year.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.