STAYER ECO 450 Week 11 Final Exam
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( Many other Questions are also Included ) 1 . The Social Security pension system is a fully funded retirement plan . 2 . Social Security pension benefits are transfers from workers to retirees . 3 . Social Security pensions are financed by voluntary contributions by workers .
4 . The gross replacement rate measures the ratio of taxes paid per year by workers to their annual Social Security pension when they retire .
5 . In the year prior to retirement , a worker earned $ 20,000 and paid $ 5,000 in taxes on those earnings . His annual Social Security pension is $ 10,000 per year . Then it follows that his net replacement rate is 50 percent .
6 . The gross replacement rate for Social Security pensions is the same for all workers independent of their preretirement earnings .
7 . The annual growth in wages subject to Social Security taxes is 3 percent . Given the payroll tax rate , the growth in funds available to pay pension benefits is also 3 percent .