Why Is the Retirement of the Baby-Boom Generation Considered a Problem

question 77

Multiple Choice

Why is the retirement of the baby-boom generation considered a problem for the future of Social Security?

• A) More retirees mean more people on Medicare, which shares a funding pool with Social Security.
• B) Retirees tend to cluster in certain states, which means that the states they are moving from will lose the benefits of their Social Security payments.
• C) Social Security functions best when there are fewer workers and more retirees, thus increasing support for the program.
• D) Retiring baby boomers will reduce the number of workers per retiree and strain the financial resources of the program.

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Definitions:

Short Position

The selling of a stock or other securities not owned by the seller, expecting the price will fall so it can be bought back at a lower price.

Contract Maturity

The specified date on a financial contract when the final payment is made or the contract comes to an end.

Futures Price

The agreed-upon price for a financial instrument or commodity to be delivered and paid for at a future date.

Spot Price

The current market price at which an asset can be bought or sold for immediate delivery.