8 . The asset-substitution effect of Social Security pensions discourages saving .
9 . The availability of Social Security pensions to workers over normal retirement age results in an income effect unfavorable to work but no substitution effect .
10 . The bequest effect of Social Security encourages workers to save less .
11 . The normal retirement age for Social Security old-age pensions is 67 for people born in the United States in 1960 or later .
12 . Workers in the United States can retire under Social Security at age 62 with lower pensions than they would receive at their normal retirement age .
13 . As of 2009 , retired workers between the ages of 62 and their normal retirement age were subject to an “ earnings test ” that reduced their pension by $ 1 for each $ 2 of earnings after a certain minimum level of earnings .
14 . Reducing the replacement rate will have no effect on the tax rate necessary to finance pensions under a pay-as-you-go , tax-financed pension system .
15 . Workers who quit their jobs are eligible for unemployment insurance benefits in the United States .
16 . By 2050 , the expected percentage of the U . S . population that is considered elderly will be less than 20 %.
17 . Social Security was created in 1965 .
18 . On average , the elderly are less likely to be poor when compared to the rest of the U . S . population .
Multiple Choice Questions 1 . The Social Security retirement system : a . is a fully funded pension system .
b . is a tax-financed system that pays benefits from taxes that are invested to return principal and interest to workers when they retire .
c . is a tax-financed retirement system that finances pensions by taxing workers each year and transferring the bulk of revenues obtained directly to retirees .
d . does not use taxes on workers to pay pensions to retirees . 2 . The gross replacement rate :