Which of the Following Statements Is Correct

question 89

Multiple Choice

Which of the following statements is correct?

• A) The Social Security program funnels transfers from retired individuals to the youngest children of low-income families.
• B) Social Security is an entitlement which is available to everyone, including those who have not contributed to the fund during their active work years.
• C) Social Security benefits are received by people who had contributed to the fund during their active work years.
• D) As a public transfer payment, Social Security benefit is available only to the poor.

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Definitions:

Risk Neutral

A risk neutral person or entity is indifferent between choices with different levels of risk, focusing solely on the expected outcome without concern for the variability of returns.

Risk Averse

Personality or preference indicating a tendency to avoid taking risks, preferring certainty or less risky options.

Income

The money received, especially on a regular basis, for work, through investments, or from benefits.

Utility Function

A mathematical representation that ranks an individual's preferences for various combinations of goods and services based on the level of satisfaction (utility) they provide.