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Two Reasons Why the Social Security System Nearly Went Bankrupt

question 121

Multiple Choice

Two reasons why the Social Security system nearly went bankrupt in the early 1980s are: (i) wages were indexed but benefits were not; (ii) the percentage of elderly people in the country declined.


Definitions:

Revenue

The total income generated by the sale of goods or services related to a company's primary operations before any expenses are deducted.

Realized

Pertains to gains or losses that have been incurred as a result of actual transactions as opposed to those that are theoretical or projected.

Earned

Income or revenue that has been generated or received for goods sold or services provided.

Retained Earnings

The portion of net income that is not distributed to shareholders but is instead reinvested in the business or kept as a reserve for certain purposes.

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