Question 1

In 2011,the Social Security program had costs of

Accepted Answer

A)  $30 million. 
B)  $20 trillion. 
C)  $200 billion. 
D)  none of these answer options are correct. 
A)  $30 million. 
B)  $20 trillion. 
C)  $200 billion. 
D)  none of these answer options are correct. D

Question 2

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 recently as August 2004,the current chairman of the Federal Reserve,Alan Greenspan,has warned that benefits will need to be reduced for future recipients or that there will need to be increases in taxes.Many working adults today are changing their saving patterns because of this outlook.

Question 3

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. C

Question 4

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 5

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 answer options are correct. 
A)  Disability payments 
B)  Health benefits 
C)  Pensions 
D)  Survivors' benefits 
E)  All of the answer options are correct.

Question 6

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

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 7

A worker within the middle-income class is preparing to retire.In the year before he retired,his gross monthly earnings are $2,500.His Social Security benefits will be $1,500 per month.Before he retired,his income was subject to a tax of 30 percent.Find his before-tax and after-tax replacement rates.

Accepted Answer

His before-tax replacement rat

Question 8

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 9

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 10

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

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 11

A fully funded plan requires

Accepted Answer

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

Question 12

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

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 13

Social Security pension benefits are

Accepted Answer

A)  subject to income taxes for those with certain income levels. 
B)  non-taxable for all retirees. 
C)  subject to state,but not federal,income taxes. 
D)  subject to capital gains taxes. 
A)  subject to income taxes for those with certain income levels. 
B)  non-taxable for all retirees. 
C)  subject to state,but not federal,income taxes. 
D)  subject to capital gains taxes.

Question 14

An earnings test as it relates to Social Security implies

Accepted Answer

A)  benefits are reduced by some predetermined amount for those who have not reached normal retirement age. 
B)  the amount of money earned during the working life of an individual determines the amount of benefits received. 
C)  family earnings determine the amount of benefits received. 
D)  all of these answer options are correct. 
A)  benefits are reduced by some predetermined amount for those who have not reached normal retirement age. 
B)  the amount of money earned during the working life of an individual determines the amount of benefits received. 
C)  family earnings determine the amount of benefits received. 
D)  all of these answer options are correct.

Question 15

In 1970 the Social Security tax rate was ______ and had increased to ______ by 2012.

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%

Question 16

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 17

A pay-as-you-go system of financing Social Security is not as good as a fully funded system.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 18

According to the Bureau of Labor Statistics,in the Federal Government,the starting salary for economists having a bachelor's degree was $35,752 in 2007.Assume that our economist will get this government job that offers a 3 percent raise annually.After 5 years of working,she quits and never works again.How much will this worker have earned over her brief working career? How much will she have paid in Social Security and Medicare taxes if the tax rate is 7.45 percent?

Accepted Answer

The worker will have earned a

Question 19

Broadly speaking,Social Security redistributes incomes from high-to low-income individuals,from men to women,and from young to old.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 20

Social Security is used to redistribute income.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

In 2011,the Social Security program had costs of

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?

The retirement effect is

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

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

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?

A pay-as-you-go system means

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

A fully funded plan requires

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

Social Security pension benefits are

An earnings test as it relates to Social Security implies

In 1970 the Social Security tax rate was and had increased to by 2012.

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

A pay-as-you-go system of financing Social Security is not as good as a fully funded system.

Broadly speaking,Social Security redistributes incomes from high-to low-income individuals,from men to women,and from young to old.

Social Security is used to redistribute income.

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 2011,the Social Security program had costs of

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?

The retirement effect is

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

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

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?

A pay-as-you-go system means

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

A fully funded plan requires

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

Social Security pension benefits are

An earnings test as it relates to Social Security implies

In 1970 the Social Security tax rate was ______ and had increased to ______ by 2012.

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

A pay-as-you-go system of financing Social Security is not as good as a fully funded system.

Broadly speaking,Social Security redistributes incomes from high-to low-income individuals,from men to women,and from young to old.

Social Security is used to redistribute income.

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 2012.