The Concept of Generational Imbalance Is Designed To

question 38

Multiple Choice

The concept of generational imbalance is designed to:

• A) figure out how to shift the current governmental budget burden to future generations.
• B) calculate the amount of fiscal burden future generations place on the present generation.
• C) decide the most efficient way to shift the current fiscal imbalance to future generations.
• D) estimate how much of a fiscal imbalance is shifted to future generations.

---

Definitions:

Interest Rate Parity

A financial theory which suggests that the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.

Arbitragers

Traders who buy and sell assets, such as stocks or commodities, in different markets or forms to profit from differing prices for the same asset.

Risk-Free Profits

Profits made from an investment that is considered to have no risk of financial loss.

Swap Market

The swap market is a financial market where parties exchange streams of cash flows or other financial instruments for a set period, often to manage risk or obtain better loan terms.