The Gains from LBOs Typically Derive from

question 36

Multiple Choice

The gains from LBOs typically derive from

• A)tax savings because of high debt servicing.
• B)loss in the value to bondholders.
• C)improved performance because of incentives to managers and employees.
• D)All of these options are correct.

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Definitions:

Automatic Stabilizers

Economic policies and programs designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers, such as unemployment insurance and progressive taxation.

National Income

The total value of all goods and services produced by a country over a specific time period, adjusted for net income from foreign investments.

Federal Budget Deficit

The shortfall when a government's expenditures exceed its revenues within a specified fiscal period.

National Debt

The aggregate financial borrowing of a country's government, acquired through multiple methods.