If Households Ignore Effects on Future Generations, a Pay as You

question 29

Multiple Choice

If households ignore effects on future generations, a pay as you go social security system:

• A)reduces investment.
• B)reduces GDP in the long run.
• C)reduces private saving.
• D)all of the above.

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Definitions:

Statement of Cash Flows

A document that outlines the effects of changes in accounts on the balance sheet and revenue on cash and cash equivalents, categorized by operating, investing, and financing actions.

Financial Statement

Documents that provide an overview of a company’s financial condition, including balance sheet, income statement, and cash flow statement.

Cash Receipts

The collection of cash during a specific period, often recorded in financial accounting to track the inflow of cash.

Financing Activity

Transactions that result in changes in the size and composition of the equity capital or borrowings of a company.