An increase in the elderly population of a country affects fiscal policy most directly because:
A) the elderly generally are not required to pay taxes.
B) governments provide pensions and health care for the elderly.
C) the elderly favor high interest rates on their savings.
D) governments spend more on education as the proportion of the elderly increases.

Question

Quizplus · Accepted Answer

An increase in the elderly population will result in higher demand for pensions and health care services, which are both typically provided by the government. This will directly impact fiscal policy as it will require governments to allocate more funds towards these services to meet the needs of the aging population.

An Increase in the Elderly Population of a Country Affects