Explain why the Social Security system faces problems. Discuss the possible solutions to these problems
What will be an ideal response?
Social security faces problems because it is a pay-as-you-go system where benefits are not tied to contributions. This has resulted in substantial underfunding, which may be exacerbated by the retirement of the baby boomers.
Solutions include increases in taxes and benefit reductions, including additional increases in the retirement age. The other alternative is privatization. This could involve government purchases of corporate securities, shift of fund assets to private accounts that could be invested in corporate securities, or creation of new private accounts that could be invested in corporate securities, funded by increased taxes.
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When expectations cause people to discriminate against a certain group, it is referred to as:
A) preferential bias. B) implicit discrimination. C) statistical discrimination. D) taste-based discrimination.
Which of the following is NOT an injection?
A) The state of Illinois builds a new courthouse. B) Kansas farmers sell 1 million bushels of wheat to Russia C) The Smithsonian Institute purchases Chris Evert Lloyd's tennis racket. D) An accountant purchases a new personal computer for use in his office.
A rational individual would make charitable contributions only if such contributions receive favorable tax treatment
a. True b. False
Hi Phi Sound Unlimited has a monopoly over the installation of surround sound systems. If Hi Phi Unlimited?s total revenue from installing 20 sound systems is $30,000 and its total revenue from installing 21 sound systems is $30,800, what is the marginal revenue of the twenty-first sound system?
A. -$1,500 B. -$700 C. $800 D. $1,467