Question 1

In 1970 the Social Security tax rate was ______ and had increased to ______ by 2008.

Accepted Answer

A) 0.84%;0.124% 
B) 12.4%;8.4% 
C) 8.4%;12.4% 
D) 84%;124% 
A) 0.84%;0.124% 
B) 12.4%;8.4% 
C) 8.4%;12.4% 
D) 84%;124% C

Question 2

In 2007,the Social Security program had costs of

Accepted Answer

A) $30 million. 
B) $20 trillion. 
C) $200 billion. 
D) none of the above. 
A) $30 million. 
B) $20 trillion. 
C) $200 billion. 
D) none of the above. D

Question 3

Work disincentives in the system of Social Security have seen the number of persons in the program increase dramatically.What incentives could be put in place to reverse,or at least slow,this trend?

Accepted Answer

Increasing the retirement age would see fewer people in the program.Other solutions include removing the survivor's benefits and introducing a more stringent wealth threshold that says that those persons with a certain wealth are not allowed to receive benefits.

Question 4

The Social Security Trust fund actually has no money in it and is filled with IOUs.Does this information impact your thinking regarding Social Security?

Accepted Answer

It should,if it had not before.The Trust

Question 5

Social insurance can be justified on the grounds of

Accepted Answer

A) adverse selection. 
B) decision-making costs. 
C) income distribution. 
D) paternalism. 
E) all of the above. 
A) adverse selection. 
B) decision-making costs. 
C) income distribution. 
D) paternalism. 
E) all of the above.

Question 6

A worker can begin receiving benefits as early as age 58.

Accepted Answer

A) True 
 B)False

Question 7

Social Security was not designed to provide insurance against outliving one's retirement.

Accepted Answer

A) True 
 B)False

Question 8

Social Security benefits have played an important role in the improved economic status of the elderly over time.

Accepted Answer

A) True 
 B)False

Question 9

Carve-out accounts

Accepted Answer

A) applies only to workers between 65 and 69 years of age. 
B) take funds away from the traditional social security system. 
C) has a tax rate of no more than 16.9 percent. 
D) does all of the above. 
A) applies only to workers between 65 and 69 years of age. 
B) take funds away from the traditional social security system. 
C) has a tax rate of no more than 16.9 percent. 
D) does all of the above.

Question 10

Suppose in the market for labor that the labor supply curve is perfectly inelastic.This would mean that the supply curve is vertical.Furthermore,suppose that demand is normal and downward sloping.Your textbook has explained that unemployment taxes are paid entirely by the employer (demanders).Who actually pays the tax in the scenario described above?

Accepted Answer

The suppliers of labor (employ

Question 11

The percentage of retired older workers has increased dramatically since the introduction of Social Security.

Accepted Answer

A) True 
 B)False

Question 12

A pay-as-you-go system means

Accepted Answer

A) you pay for your dinner as you go to the table to eat. 
B) current working citizens pay for current retired citizens. 
C) there is no need for taxes since current workers pay for current retirees. 
D) retirees are paid from accounts that have accumulated with interest over their working lives. 
A) you pay for your dinner as you go to the table to eat. 
B) current working citizens pay for current retired citizens. 
C) there is no need for taxes since current workers pay for current retirees. 
D) retirees are paid from accounts that have accumulated with interest over their working lives.

Question 13

The Social Security Administration has which program(s)to administer?

Accepted Answer

A) disability payments 
B) health benefits 
C) pensions 
D) survivors' benefits 
E) all of the above 
A) disability payments 
B) health benefits 
C) pensions 
D) survivors' benefits 
E) all of the above

Question 14

Social security taxes are projected to fall short of benefits starting in

Accepted Answer

A) 2005. 
B) 2010. 
C) 2017. 
D) 2020. 
A) 2005. 
B) 2010. 
C) 2017. 
D) 2020.

Question 15

When workers save less during their working lives due to the fact that they have been paying Social Security taxes,this is known as

Accepted Answer

A) the Social Security effect. 
B) the wealth substitution effect. 
C) the bequest effect. 
D) the life cycle hypothesis. 
A) the Social Security effect. 
B) the wealth substitution effect. 
C) the bequest effect. 
D) the life cycle hypothesis.

Question 16

The retirement effect is

Accepted Answer

A) when people retire later than they normally would have due to Social Security. 
B) when people decide not to retire at all because of problems with Social Security. 
C) when people retire earlier than they normally would have due to Social Security. 
D) when people save less for their retirement due to Social Security. 
A) when people retire later than they normally would have due to Social Security. 
B) when people decide not to retire at all because of problems with Social Security. 
C) when people retire earlier than they normally would have due to Social Security. 
D) when people save less for their retirement due to Social Security.

Question 17

Do you feel that when you retire there will still be Social Security? If so,do you feel that benefits will be at present levels or tax rates will have increased? Finally,has this discussion changed your plans regarding your own personal savings for your retirement?

Accepted Answer

This is a personal question,but as recen

Question 18

Asymmetric information generally implies

Accepted Answer

A) information between parties is not equal. 
B) all parties are fully informed. 
C) information is costless. 
D) information is too costly to transmit. 
A) information between parties is not equal. 
B) all parties are fully informed. 
C) information is costless. 
D) information is too costly to transmit.

Question 19

Suppose that the ratio of retirees to working citizens is currently 1 to 5,meaning that there are 5 working people for every retiree.Suppose that in thirty years the ratio will change to 1 to 2.If benefits remain the same,what will happen to the tax rate assuming retirees are provided benefits in a pay-as-you-go system? How much would benefits decrease if the tax rate remained the same?

Accepted Answer

Initially,a worker paid for 20 percent o

Question 20

Average indexed monthly earnings are derived from the worker's earnings history and determine the primary insurance amount (PIA).

Accepted Answer

A) True 
 B)False

In 1970 the Social Security tax rate was and had increased to by 2008.

In 2007,the Social Security program had costs of

Work disincentives in the system of Social Security have seen the number of persons in the program increase dramatically.What incentives could be put in place to reverse,or at least slow,this trend?

The Social Security Trust fund actually has no money in it and is filled with IOUs.Does this information impact your thinking regarding Social Security?

Social insurance can be justified on the grounds of

A worker can begin receiving benefits as early as age 58.

Social Security was not designed to provide insurance against outliving one's retirement.

Social Security benefits have played an important role in the improved economic status of the elderly over time.

Carve-out accounts

The percentage of retired older workers has increased dramatically since the introduction of Social Security.

A pay-as-you-go system means

The Social Security Administration has which program(s)to administer?

Social security taxes are projected to fall short of benefits starting in

When workers save less during their working lives due to the fact that they have been paying Social Security taxes,this is known as

The retirement effect is

Do you feel that when you retire there will still be Social Security? If so,do you feel that benefits will be at present levels or tax rates will have increased? Finally,has this discussion changed your plans regarding your own personal savings for your retirement?

Asymmetric information generally implies

Average indexed monthly earnings are derived from the worker's earnings history and determine the primary insurance amount (PIA).

Introduction

Tools of Positive Analysis

Tools of Normative Analysis

Public Goods

Externalities

Political Economy

Education

Cost-Benefit Analysis

The Health Care Market

Government and the Market for Health Care

Income Redistribution: Conceptual Issues

Expenditure Programs for the Poor

Taxation and Income Distribution

Taxation and Efficiency

Efficient and Equitable Taxation

The Personal Income Tax

Personal Taxation and Behavior

The Corporation Tax

Deficit Finance

Fundamental Tax Reform: Taxes on Consumption and Wealth

Public Finance in a Federal System

Filters

Exam 11: Social Security

In 1970 the Social Security tax rate was ______ and had increased to ______ by 2008.

In 2007,the Social Security program had costs of

Work disincentives in the system of Social Security have seen the number of persons in the program increase dramatically.What incentives could be put in place to reverse,or at least slow,this trend?

The Social Security Trust fund actually has no money in it and is filled with IOUs.Does this information impact your thinking regarding Social Security?

Social insurance can be justified on the grounds of

A worker can begin receiving benefits as early as age 58.

Social Security was not designed to provide insurance against outliving one's retirement.

Social Security benefits have played an important role in the improved economic status of the elderly over time.

Carve-out accounts

The percentage of retired older workers has increased dramatically since the introduction of Social Security.

A pay-as-you-go system means

The Social Security Administration has which program(s)to administer?

Social security taxes are projected to fall short of benefits starting in

When workers save less during their working lives due to the fact that they have been paying Social Security taxes,this is known as

The retirement effect is

Do you feel that when you retire there will still be Social Security? If so,do you feel that benefits will be at present levels or tax rates will have increased? Finally,has this discussion changed your plans regarding your own personal savings for your retirement?

Asymmetric information generally implies

Average indexed monthly earnings are derived from the worker's earnings history and determine the primary insurance amount (PIA).

Introduction

Tools of Positive Analysis

Tools of Normative Analysis

Public Goods

Externalities

Political Economy

Education

Cost-Benefit Analysis

The Health Care Market

Government and the Market for Health Care

Income Redistribution: Conceptual Issues

Expenditure Programs for the Poor

Taxation and Income Distribution

Taxation and Efficiency

Efficient and Equitable Taxation

The Personal Income Tax

Personal Taxation and Behavior

The Corporation Tax

Deficit Finance

Fundamental Tax Reform: Taxes on Consumption and Wealth

Public Finance in a Federal System

Filters

In 1970 the Social Security tax rate was and had increased to by 2008.