When the Social Security System Begins Running a Deficit, the Bonds

question 76

Multiple Choice

When the Social Security system begins running a deficit, the bonds in the trust fund will be drawn down. The funds to redeem these bonds will have to come from

• A) higher taxes, spending reductions in other programs, or additional government borrowing.
• B) the surplus funds deposited in governmental banking accounts.
• C) equity capital being liquidated.
• D) the sale of private equities and securities that the government has been purchasing with the funds.

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Definitions:

Normal Good

A type of good for which demand increases as the income of the consumer increases.

Popcorn

A type of corn kernel which expands and puffs up when heated, commonly seasoned and served as a snack.

DVDs

Digital Versatile Discs, a type of optical storage media used for storing data, including movies and software.

Luxury Good

A good for which demand increases more than proportionally as income rises, often perceived as status symbols.