1.. Decide whether the following statement makes sense(or is clearlytrue) or does not make sense(or is clearlyfalse). Explain your reasoning.

Because social security is an entitlement program and is funded by mandatory governmentspending, I know it will be there when I retire in 40 years.

Choose the correct answer below.

A.

This does not make sense because Social Security is not funded by mandatory government spending. It is a discretionary project.

B.

This makes sense because all of the Social Security taxes collected are put into a trust fund that goes out to future retirees.

C.

This does not make sense because the gross debt is constantly increasing each year. Eventually the government may not have the resources to repay the Treasurybills, plusinterest, in the Social Security trust fund.

D.

This makes sense because the Treasury bills in the Social Security trust fund represent a publicly helddebt, which is money that the government must repay to individuals and institutions that bought Treasury issues.

2.. What are exemptions anddeductions? How should you choose between taking the standard deduction and itemizingdeductions?