In a Fully-Funded Social Security Program

question 12

Multiple Choice

In a fully-funded social security program

• A) the young pay for the benefits of the old.
• B) the young are forced to save for their own retirement.
• C) the young have to buy bonds for the old.
• D) the young are forced to save for the retirement of the old.

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Definitions:

Aggregate Expenditure

The total amount spent on goods and services in an economy at a given level of income during a specific period.

Marginal Propensity

The ratio of the change in consumption or saving to the change in income, indicating how income changes affect spending or saving behaviors.

Aggregate Expenditure

The total amount of spending in the economy that includes consumer spending, investment, government spending, and net exports.

Multiplier

An economic factor that quantifies the change in income levels resulting from a change in spending or investment.