Refer to the information provided in Figure 2.4 below to answer the question(s) that follow. Figure 2.4According to Figure 2.4, Point F

Social Security benefits are determined by a complex formula that is rarely discussed publicly but the information is available on the Social Security Administration's website

A recipient's lifetime earnings is indexed and averaged over the highest 35 years of earnings to obtain an Average Monthly Indexed Earnings amount (AIME). If Social Security benefits begin at age 65 to 67, the monthly benefit in 2007 is 90% of the first $680 of AIME, 32% of AIME above $680 and less than $4100, and only 15% of AIME in excess of $4100 . For example, an individual whose indexed earnings were at the poverty level of $10,200/year would receive 78.4% of that in benefits, while an average earner of $37,000/year would receive only 44.8% of that in benefits, and individual's with above average earnings receive an even lower proportion in benefits. Using this information how could one argue that the payroll tax is not regressive?

In what way do policymakers have to face a trade-off between inflation and unemployment?

A. The cost of reducing inflation by restrictive fiscal and monetary policies is a temporary increase in unemployment. B. The cost of reducing inflation by restrictive fiscal and monetary policies is a permanent increase in unemployment. C. The cost of reducing unemployment by expansionary fiscal and monetary policies is virtually nonexistent. D. The cost of reducing unemployment by expansionary fiscal and monetary policies involves higher inflation during recessions.