Given the way Social Security is financed,which of the following is true?
A)Social Security results in a transfer of income from the old to the young
B)Social Security results in a transfer of income from the young to the old
C)Social Security has a neutral effect on the nation's income distribution
D)The purchasing power of the elderly has been diminished by Social Security taxes
E)(a)and (d)

Question

Quizplus · Accepted Answer

Social Security is a system that collects taxes from current workers and uses that money to provide benefits to retired or disabled individuals. This system results in a transfer of income from the young (who are currently working and paying into the system) to the old (who are currently receiving benefits from the system). Therefore, option B is the correct answer. Option A is incorrect because Social Security transfers income from the young to the old, not the other way around. Option C is incorrect because Social Security does affect income distribution by providing benefits to certain groups, such as elderly or disabled individuals. Option D is partially correct in that Social Security taxes do reduce the purchasing power of the elderly, but it is not the only effect of the system. Option E is incorrect because option A is incorrect.

Given the Way Social Security Is Financed,which of the Following