When the Current Social Security Surpluses End and the Bonds

question 64

Multiple Choice

When the current Social Security surpluses end and the bonds in the trust funds are reduced in order to make payments to retirees, the financing for the redemption of the trust fund bonds will come from

• A) higher taxes or more government borrowing.
• B) the surplus funds deposited in government banking accounts.
• C) equity capital being liquidated.
• D) the sale of private equities and securities that the government has been purchasing with the funds.

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Definitions:

Marginal Decision Rule

A principle stating that an action should be taken if and only if the marginal benefits exceed the marginal costs.

ATC

Average Total Cost, which represents the total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.

MR

Stands for Marginal Revenue, which is the additional income earned from selling one more unit of a good or service.

Economic Profit

The difference between a firm's total revenues and its total costs, including both explicit costs and opportunity costs.