During the Last Two Decades, Most of the Surplus Generated

question 211

Multiple Choice

During the last two decades, most of the surplus generated by the Social Security system was

• A) used to finance current government expenditures.
• B) invested in government bonds that will make it possible for the federal government to pay future retirement benefits without an increase in federal taxes.
• C) used to pay down the national debt.
• D) invested in bonds offered by foreign governments and businesses that will provide a stream of future income for the finance of retirement benefits.

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Definitions:

Financial Innovation

The creation or improvement of financial products, services, or processes.

Commodity Traders

Individuals or entities that buy and sell physical or financial commodities, aiming to profit from price fluctuations.

Bid-ask Spreads

The variation between the top price a buyer intends to pay (bid) and the bottom price a seller is prepared to take (ask) for an asset.

Market Equilibrium

The state in which market supply and demand balance each other, and as a result, prices become stable.