Which of the following statements about Social Security is FALSE?
A) Social Security is an intergenerational transfer where the benefits paid are only roughly related to past earnings.
B) Over 90 percent of all employed workers in the United States are covered by Social Security.
C) Benefit payments under Social Security are based on the recipient's need.
D) Benefit payments under Social Security redistribute income from young to old.
Answer: C
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If the marginal propensity to consume (MPC) is 0.8, the multiplier will be
A) 1. B) 5. C) 0.8. D) 4.
The economic policy response to the 2001 recession consisted of
A) a rapid change in fiscal policy and monetary policy. B) a sluggish change in fiscal policy and monetary policy. C) a rapid change in fiscal policy and a sluggish change in monetary policy. D) a sluggish change in fiscal policy and a rapid change in monetary policy.