Social Security Is a System Where Current Workers' Pay Taxes

question 136

Multiple Choice

Social Security is a system where current workers' pay taxes that are used to pay current retirees' benefits.How is Social Security funded?

• A)Income taxes by all Americans
• B)Payroll taxes on employees up to a salary cap
• C)Payroll taxes on employers up to a salary cap
• D)All of the above are correct.
• E)Only B and C are correct.

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Definitions:

Opposite

In the context of numbers, it refers to the additive inverse of a number, which when added to the original number, results in zero.

Compounded Quarterly

A method where interest is calculated and added to the principal balance four times a year, affecting the total interest accrued over time.

Promissory Note

An economic tool comprising a formal pledge by one party to give a specific amount of money to another, redeemable upon request or at a predetermined time.

Discounted

Refers to the reduction of an item's price or the present value of future cash flows discounted back to the present value.