The Key Lesson from the LRBC Model Is

question 54

Multiple Choice

The key lesson from the LRBC model is:

• A) nations can safely run trade deficits as long as they can cover the interest each year.
• B) nations must balance their current account year by year.
• C) nations must maintain a balance between the present value of deficits and the present value of surpluses that satisfy the LRBC.
• D) nations may lend externally but it is dangerous to borrow.

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Definitions:

Social Security System

A government program designed to provide financial support to individuals during retirement, disability, or unemployment.

Employee Retirement Income Security Act (ERISA)

A federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.

Mandated Benefit

Benefits that employers are required by law to provide to their employees, such as social security, unemployment, and workers' compensation.

Workers' Compensation

An insurance type that offers medical benefits and compensates for lost wages to workers hurt while performing their job duties.