| Questions | Answers | Marks |
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1. Social Security benefits resemble which type of pension benefits?
A) Defined contribution, annuity
B) Defined contribution, lump sum
C) Defined benefit, annuity
D) Defined benefit, lump sum
|
A
B
C
D
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2. What is the key factor affecting Social Security's viability?
A) Productivity growth
B) The Budget deficit
C) The ratio of workers to retirees
D) The value of the stock market
|
A
B
C
D
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3. Half of the Social Security tax is paid by workers (employees), and half is paid by their companies (employers). The economic impact of the portion paid by employers is:
A) It reduces the wages that they pay workers.
B) It reduces corporate profits.
C) It raises prices.
D) All of the above.
|
A
B
C
D
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4. 2004 Nobel Laureate Edward Prescott believes that
A) We need to repeal the Bush tax cuts, so that the government can accumulate funds to pay for the Baby Boomers' Social Security benefits
B) Social Security taxes discourage work in the market economy
C) Productivity growth is the key to protecting Social Security
D) The elderly are going to need more aid when the bubble in housing prices pops
|
A
B
C
D
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5. If Social Security were partially privatized, then:
A) The government would have to borrow money in the short run, but then owe less in Social Security payments years from now.
B) Today's retirees would lose their benefits.
C) The government would have to run a huge deficit, from which it would never recover.
D) Not necessarily any of the above
|
A
B
C
D
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6. Opponents of privatization argue that
A) it will create a shortfall in funds to pay current retirees, which will have to be met by higher taxes or more borrowing in the near term.
B) individuals will make bad choices if they are allowed to invest their own money
C) the private sector would add another layer of administrative overhead
D) all of the above
|
A
B
C
D
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7. Defenders of privatization argue that it would
A) help balance the Budget
B) change the ratio of workers to retirees
C) improve the incentives for Americans to work and save
D) all of the above
|
A
B
C
D
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8. Social Security went from being less than 1 percent of Federal outlays 50 years ago to being the largest component of outlays today because
A) Seniors became increasingly greedy
B) The problem of poverty among seniors became acute
C) The Baby Boom generation started to reach retirement age
D) Longevity has increased
|
A
B
C
D
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