Question

Figure 11.5 assumed that the implicit rate of return from Social Security was the same as the private rate of return available to Liang from private savings. Assume now that Social Security has a lower implicit rate of return than the private return. How would the introduction of this Social Security system affect the budget constraint in Figure 11.5? What do you expect to happen to the amount Liang saves?


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  • CreatedMarch 25, 2015
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