One of the Myths About Social Security Is That the Government

question 56

Multiple Choice

One of the myths about social security is that the government runs a surplus in the Social Security Trust Fund.Which of the following debunks this myth?

• A)The number of people retiring every year has steadily declined since 1950.
• B)There are no trust funds and the proceeds from the social security taxes are used to purchase Treasury bonds.
• C)The number of people joining the workforce is increasing over time.
• D)The social security taxes has been increased by the government since 1990.
• E)The retirees receive much less than the amount paid by the current workers under the pay-as-you go system.

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Definitions:

Equity Method

An accounting technique used when a company invests in another company and has significant influence, typically reflected by owning 20% to 50% of the voting stock, whereby the investment is initially recorded at cost and subsequently adjusted for the investing company's share of the investee's net profits or losses.

Investment in Humble

A financial stake in the company Humble, potentially involving the purchase of shares or other assets to gain a financial return.

FVE Method

An accounting technique where assets and liabilities are valued and reported at their fair value for financial reporting purposes.

Cost Method

An accounting method for investment, where the investment is recorded at cost and is adjusted for dividends received, rather than market value fluctuations.