Why Did the Government Recently Give Financial Bailouts to GM

question 147

Multiple Choice

Why did the government recently give financial bailouts to GM Canada and Chrysler Canada?

• A) because their bankruptcies would cause an enormous financial ruin for the Canadian economy
• B) because the Canadian government had previously borrowed from both companies in the past
• C) because the Canadian government owed a moral debt because of the jobs they had created in past decades
• D) because these companies had long histories of keeping production in Canada, compared to other companies that outsourced

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Definitions:

Security Interest

A security interest is a legal right granted by a debtor to a creditor over the debtor's property, ensuring the property may be used as collateral for the repayment of a debt.

Consumer Good

A consumer good is a product intended for final consumption by individuals or households as opposed to being used in the production of other goods or services.

Security Interest

A legal claim or lien on collateral that has been pledged, usually to secure repayment of a loan or debt.

Purchase-Money Security Interest

A security interest in property that secures the extension of credit by a lender to the borrower for the purpose of acquiring the property.