Why Do Consumers Benefit from Pay-As-You-Go Social Security

question 9

Multiple Choice

Why do consumers benefit from pay-as-you-go social security?

• A) It keeps inflation in check as money is redistributed.
• B) It is a better way than taxes to finance the government.
• C) It forces people to save more than they would otherwise.
• D) With sufficiently high population growth, many young contribute to the benefits of the old.
• E) With sufficiently low population growth, the young can perpetually contribute more.

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Definitions:

Marginal Cost Curves

A graphical representation that shows how the cost of producing one more unit of a good or service varies as production increases.

Market Supply Curve

A graphical representation showing the total quantity of a good or service that suppliers are willing and able to sell at different prices.

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the actual amount they receive in the market.

Economic Rent

Income derived from the possession of a unique resource, exceeding that which is needed to keep the resource in its current employment.