The US Federal Government Is Unlikely to Default on Its Bonds

question 223

Multiple Choice

The U.S. federal government is unlikely to default on its bonds because

• A) the bonds are all long-term bonds and they are insured.
• B) the federal government has the ability to collect taxes and to sell securities to the Fed.
• C) foreigners are willing to buy the federal government bonds and lend to the U.S. government.
• D) the federal government can always borrow from the states and from businesses.

---

Definitions:

Pyridine

A basic heterocyclic organic compound with the chemical formula C5H5N, resembling benzene but having a nitrogen atom replacing one of the carbon atoms.

Orbital

A region in an atom where there is a high probability of finding electrons.

Increasing pKa

This refers to the process or trend of increasing the acidity constant (pKa), indicating a decrease in acid strength.

Resonance Structures

Different Lewis structures for the same molecule that depict different possible arrangements of electrons.