The net effect of savings of the asset substitution, induced retirement and bequest effects combined is that people save ________they would have without Social Security.
A)slightly less than
B)more than
C)the same as

Question

Quizplus · Accepted Answer

The asset substitution effect encourages individuals to save more while the other two effects (induced retirement and bequest) reduce the incentives to save. Overall, the retirement and bequest effects tend to dominate the asset substitution effect, resulting in people saving slightly less than they would have without Social Security.

The Net Effect of Savings of the Asset Substitution, Induced