Recent Proposals to Allow the Social Security Trust Fund to Invest

question 9

Multiple Choice

Recent proposals to allow the Social Security trust fund to invest in the stock market (instead of buying government bonds) are based on the premise that

• A)the returns to stocks are higher than the returns to bonds.
• B)the returns to stocks aren't as risky as the returns to bonds.
• C)the transactions costs for investing in stocks are lower than the transactions costs for investing in bonds.
• D)stocks are more liquid than bonds.

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Definitions:

Competition

The rivalry among businesses to attract customers, which can lead to improved quality, lower prices, and innovation.

Social Interest

The welfare or well-being of the general public and society at large, considering the collective needs rather than individual interests.

No Personal Financial Responsibility

A situation where individuals do not bear direct financial consequences for their actions, often due to insurance, subsidies, or other protective measures.

Corporations

Legal entities that are separate from their owners, providing limited liability protection, and have the ability to raise capital through selling shares.