Matt Just Made a Fortune Inventing a New Piece of Software

question 52

Multiple Choice

Matt just made a fortune inventing a new piece of software and has generously agreed to support his friend's application for a bank loan. Matt tells his friend he is willing to cover the debt no matter what happens. In order for this promise to be enforceable,

• A) Matt's friend needs to get Matt to make that same promise to the bank.
• B) Matt's friend needs to get Matt to fax the bank.
• C) the bank needs to get it in writing.
• D) Matt's friend needs to have the promise notarized and sent to the bank by registered mail.
• E) the bank needs do nothing.

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Definitions:

Supply-Side Economists

Economists who believe that reducing tax rates and deregulating markets to facilitate the supply of goods and services are the best ways to stimulate economic growth.

High Tax Rates

Elevated percentages of an individual's or company's income that must be paid to the government, affecting disposable income and investments.

Laffer Curve

A theoretical representation suggesting that there is an optimal tax rate that maximizes revenue without discouraging economic activity.

Classical Economists

Economists and thinkers primarily from the 18th and 19th centuries, such as Adam Smith, David Ricardo, and John Stuart Mill, who focused on developing theories about the workings of market economies.