If Inflation Is Correctly Anticipated, Those Who Buy Government Bonds

question 60

Multiple Choice

If inflation is correctly anticipated, those who buy government bonds will:

• A)suffer losses regardless of inflation because interest paid on government bonds is set by Congress.
• B)not suffer losses because inflation does not affect the purchasing power.
• C)suffer losses because they will be compensated by lower interest payments.
• D)not suffer losses because they will be compensated by higher interest payments.

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Definitions:

Agency Representation

A form of representation in which elected officials serve as agents of their constituents, acting in the constituents' interest rather than their own personal interest.

Pork Barrel

Refers to the allocation of government spending for localized projects secured primarily to bring money to a representative's district.

Senator Term

The period during which an individual serves as a senator, typically six years in the United States Senate, after which they may seek re-election.

Common Occupation

A job or profession that is widely held or engaged in by people within a particular society.