If the Social Security Program Was Privatized

question 61

Multiple Choice

If the Social Security program was privatized,

• A)Work disincentives for younger workers would definitely increase.
• B)Income inequalities would definitely decrease.
• C)Individuals would essentially make contributions to their own pension fund.
• D)The system would be financed on a pay-as-you-go basis.

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Definitions:

Portfolio

A group of investment vehicles comprising stocks, bonds, commodities, as well as cash and its equivalents, together with mutual funds and ETFs.

Adverse Selection

Adverse selection refers to a situation where sellers have information that buyers do not, or vice versa, about some aspect of product quality.

Utility Function

A mathematical representation of how consumers rank different bundles of goods according to their level of satisfaction or utility.

Wealth

The presence of significant financial assets or tangible property that can be transformed into a medium suitable for trade.