The Basic Distinction Between Social Insurance Programs and Means-Tested Programs

question 83

Multiple Choice

The basic distinction between social insurance programs and means-tested programs is that the former involve

• A) payments to and from a trust fund, and the latter involve benefits from general revenues for people who qualify based on low income.
• B) benefits from general revenues for people who qualify based on low income, and the latter involve payments to and from a trust fund.
• C) federal payments to retired people, and the latter involve state payments toward medical costs.
• D) state payments toward medical costs, and the latter involve federal payments to retired people.

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Definitions:

Collection

The process of gathering or accruing items or amounts owed to a business, typically in the context of accounts receivable.

Loan Made

Money that is lent to another party in exchange for future repayment of the loan value amount, plus interest.

Indirect Method

An accounting technique used to prepare the cash flow statement, where increases in non-cash current assets are subtracted from, and increases in current liabilities are added to, net income to arrive at net cash flow from operating activities.

Net Cash

The difference between all cash inflows and outflows within a given period, often used to assess financial health.