When the Social Security Surplus Is Used to Cover the Current

question 3

Multiple Choice

When the Social Security surplus is used to cover the current operating expenses of the federal government, it will

• A) make it easier for future taxpayers to provide promised Social Security benefits to baby boomers.
• B) reduce the outstanding debt of the federal government.
• C) make it possible for Congress and the president to spend more without raising current taxes or borrowing from the general public.
• D) increase the credibility of the Social Security benefits promised to future retirees.

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Definitions:

Units-Of-Activity

A depreciation method that allocates expenses based on the actual usage or activity levels of an asset.

Salvage Value

A projection of an asset's value at the end of its period of functionality.

Depreciation Cost

The systematic allocation of an asset's cost over its useful life to reflect the loss in value over time.

Plant Asset

Long-term tangible assets that are used in the production of goods and services, including machinery, buildings, and equipment.