Which of the Following Would Be a Good Example of a Government

question 50

Multiple Choice

Which of the following would be a good example of a government program that provides an "indexed" social benefit?

• A)a federally-run program that provides small business owners who hire a military veteran with a cash payment of $2,500 for every six months of the program's operation
• B)a local government program that provides low-income families with a benefits card that can be used to purchase $5,000 of groceries during every year of the program's operation
• C)a federally-run program that provides $750 to low-income families in the first year of implementation and that increases payments by 1.5 percent in each subsequent year of the program's operation
• D)a state government program that provides $750 every year to low-income families for every month of the program's operation

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Definitions:

Underlying Stock

The basic security or asset upon which derivative contracts, such as options and futures, are based.

Exercise Price

The predetermined price at which an option can be exercised, allowing the holder to buy or sell the underlying asset.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by the yield on government bonds.

Inflation Rate

The percentage increase in the price level of goods and services in an economy over a period of time.