The Main Problem with the Social Security Program Is That

question 2

Multiple Choice

The main problem with the social security program is that ______.

• A) it will soon run out of money since, as a welfare program, it is politically unpopular
• B) it will soon run out of money to pay benefits because too few workers will be paying into the system
• C) it will soon run out of money; it's financed through taxes at a time when governments are reducing taxes
• D) it will soon run out of money because of the increase in employed workers trying to access benefits

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Definitions:

Lessor's Implicit Rate

The interest rate in a lease that yields the same net investment in the lease as the present value of the minimum lease payments and any unguaranteed residual value.

Ordinary Annuity

A series of equal payments made at equal intervals of time, with the payments occurring at the end of each period.

Present Value Factors

The factors used to calculate the present value of a future amount of money or stream of cash flows, given a specific discount rate.

Long-term Lease Obligation

A financial commitment that involves leasing an asset for a long-term period, noted on the balance sheet as a liability.