Final answer:
Custodial funds are resources held by a government in a fiduciary arrangement without a formal trust, including debt held in government trust funds for Medicare and Social Security, funded by taxes like FICA, and invested in government securities.
Step-by-step explanation:
The relatively new category that includes resources held by a government in a fiduciary arrangement not created through a formal trust agreement is called Custodial funds.
These funds represent resources that the government holds as a custodian or financial agent for individuals, private organizations, other government units, and/or other funds. An example of such custodial activities includes money the government owes to itself, particularly debt held in government trust funds.
For instance, government trust funds such as those for Medicare and Social Security are funded through specific types of expenditures. When the government collects taxes like the FICA tax, it uses these funds to invest in government securities until the money is needed for payouts. Although this represents a situation in which the government is indebted to itself, it is considered a substantial part of the national debt.