Question

Social Security solves the adverse selection problem in the annuities market by:

A. incentivizing people to save more for retirement.
B. paternalistically ensuring that the elderly do no fall into ит
poverty.
C.compelling people to think in the long run rather than the
short run.
D. mandating that everyone pay into the system

Answer 1

Social Security solves the adverse selection problem in the annuities market by mandating that everyone pay into the system.

Step-by-step explanation:

Social Security solves the adverse selection problem in the annuities market by mandating that everyone pay into the system.

Social Security is a government-run program that requires individuals to contribute a portion of their income towards retirement benefits. By making it mandatory for everyone to pay into the system, Social Security ensures that all individuals have some form of retirement income, reducing the adverse selection problem in the annuities market.