Which of the Following Best Explains Why the Social Security

question 87

Multiple Choice

Which of the following best explains why the Social Security system will face financial difficulties in the future?

• A) Too much Social Security revenue was invested in the private sector rather than in government bonds.
• B) In the next two decades, the number of workers paying into the system will decline sharply relative to the number of retirees collecting benefits.
• C) The federal government does not pay interest on the money it borrows from the Social Security system.
• D) The funds in the Social Security trust fund were invested in high-risk ventures that failed to pay off.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), calculated as gross profit minus all operating expenses, including depreciation and amortization.

Investments

Financial assets purchased with the aim of generating income or appreciation in value over time.

Providing Service

Providing service involves performing tasks or work for customers, often in exchange for payment, as part of a business's operations.

Additional Paid-in Capital

This refers to the amount of money investors have paid for shares above and beyond the par value of the shares, recorded in the equity section of the balance sheet.