As a Result of the Large Surpluses Following the Clinton

question 18

Multiple Choice

As a result of the large surpluses following the Clinton Administration, what did President George W. Bush do in 2001, which reduced the surplus?

• A) increased government spending
• B) made substantial cuts in taxes
• C) raised the interest rate to reduce spending
• D) lowered the interest rate to stimulate spending

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Definitions:

Cash Flow

The net amount of cash being transferred into and out of a business, project, or financial product.

Required Return

The minimum annual percentage earned by an investment that will entice individuals or companies to invest their money.

Zero-Coupon Bond

A debt security that is issued at a discount and repaid at face value but does not pay interest during its life.

Investment

The allocation of resources (such as time, money, or effort) in the expectation of generating an income or profit.