A pay as you go social security system only increase consumption and reduces investment, if:
A)households leave bequests.
B)if households neglect the adverse affects on their descendants.
C)if the planning horizon is overlapping generations.
D)households increase their savings.

Question

Quizplus · Accepted Answer

If households neglect the adverse effects on their descendants, it means they are not considering the long-term impact of their consumption decisions on their offspring's financial stability. This could lead to a reduction in investment as savings are not being accumulated for future generations.

A Pay as You Go Social Security System Only Increase