The correct option regarding the nature and recordings of United States implicit liabilities.
Explanation of Solution
Despite not being reflected in the regular debt figures, implicit liabilities are basically debts since they represent expenditure commitments made by administrations. The biggest implicit liabilities for the American government come from Social Security and Medicare, two transfer programs that primarily help elderly citizens. Low-income households gain from Medicaid, the third-largest implicit burden. The government has each time pledged to provide transfer payments to both present and future recipients. Therefore, even if the debt is not now shown in the typical statistics, these initiatives still constitute a future obligation that must be paid. Currently, these three programs make for about 40% of all government spending.
Thus, from the above we can conclude that the correct option is D.
Chapter 30 Solutions
Krugman's Economics For The Ap® Course
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education