If households ignore effects on future generations, a pay as you go social security system:
A)reduces investment.
B)increases GDP in the long run.
C)increases private saving.
D)all of the above.

Question

Quizplus · Accepted Answer

If households ignore effects on future generations, they may not save enough for retirement and rely heavily on social security benefits. As a result, the pay-as-you-go social security system may have to reduce benefits, increase taxes or both, which reduces investment in the current economy.

If Households Ignore Effects on Future Generations, a Pay as You