The Social Security System Is Currently Generating Tax Revenues That

question 446

Multiple Choice

The Social Security system is currently generating tax revenues that exceed the benefits paid to recipients. This surplus is

• A) being invested in foreign bonds, which will provide Americans with a source of income when the baby boom generation retires.
• B) being invested in government bonds, which will require an increase in general tax revenues when the bonds come due.
• C) separated from other government revenue so politicians will not spend the money during the current period.
• D) being channeled into earmarked private savings accounts.

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Definitions:

Price Ceiling

A regulation that sets the maximum allowable price for a particular good or service, intended to prevent sellers from charging high prices during demand spikes.

Government Intervention

Actions taken by government to affect the economy, markets or societal issues, which can include regulations, subsidies, and taxes.

Positive Externalities

These are benefits that a transaction or activity provides to those not involved in the transaction or activity.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction that they were not directly involved in.