If a Government Sells Debt to Help Meet Its Expenditures,then

question 31

Multiple Choice

If a government sells debt to help meet its expenditures,then the government has a

• A)budget surplus.Other things the same,the surplus rises if government expenditures rise.
• B)budget surplus.Other things the same,the surplus rises if government expenditures fall.
• C)budget deficit.Other things the same,the deficit rises if government expenditures rise.
• D)budget deficit.Other things the same the deficit rises if government expenditures fall

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Definitions:

Call Protection

Call Protection is a feature of some bonds that prohibits the issuer from redeeming the bond before a specified period, protecting bondholders from early repayment.

Conversion Feature

Refers to an option within a bond or preferred stock that allows the holder to convert it into a certain number of shares of the issuing company's common stock.

Dividend Yield

The ratio of a company's annual dividends relative to its share price, indicating how much income investors are getting from their investment.

Yield-To-Maturity

Yield-to-maturity (YTM) is the total return anticipated on a bond if the bond is held until it matures, incorporating both interest payments and the capital gain or loss realized upon maturity.