If Government Expenditures Exceed Tax Receipts in a Developing Country

question 10

Multiple Choice

If government expenditures exceed tax receipts in a developing country, the government is most likely to:

• A)cut spending.
• B)increase taxes.
• C)sell bonds to the central bank.
• D)buy bonds from the central bank.

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Definitions:

Investment Contract

In securities law, a transaction in which a person invests in a common enterprise reasonably expecting profits that are derived primarily from the efforts of others.

Franchise

A business model where a brand allows individuals to start their businesses using its trademark, systems, and processes.

Security

Measures or mechanisms employed to guard against theft, attack, or other threats, ensuring the safety of individuals or assets.

National Security Exchange

A regulated marketplace for the trading of securities, such as stocks and bonds, that must adhere to specific government standards for the protection of investors.