Explain how the Social Security program affects economic output.
What will be an ideal response?
The Social Security program reduces economic output in two ways. First, total output falls when workers retire or work less because they receive Social Security payments. Second, the payroll taxes used to finance Social Security increase the cost of labor and discourage people from working more.
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If a government decides to move from a regressive tax system to a progressive tax system, there will be a(n) ________ in equity and a(n) ________ in efficiency
A) increase; increase B) decrease; decrease C) increase; decrease D) decrease; increase
A company is considering the purchase or the rental of a new machine. An increase in the interest rate
A) increases the likelihood the company will buy the machine. B) increases the likelihood the company will rent the machine. C) has no effect on the likelihood that the company will buy the machine. D) has no effect on the likelihood that the company will rent the machine.
The BIC is a statistic
A) commonly used to test for serial correlation B) only used in cross-sectional analysis C) developed by the Bank of England in its river of blood analysis D) used to help the researcher choose the number of lags in an autoregression
The current account records
a. last year's flows of funds into and out of the country b. current flows of imports and exports of goods and services, net income earned by U.S. residents from foreign assets, and net transfer payments c. current flows of imports and exports of goods only d. only net income earned by U.S. residents from foreign assets e. only current flows of imports and exports of goods and services and net transfer payments