A Budget Deficit Will Require the Government to Issue Bonds

question 123

True/False

A budget deficit will require the government to issue bonds to fill in the gap in the budget.

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Definitions:

Financing Activities

Transactions involving long-term liabilities and equity of a company, including issuing debt, repurchasing shares, and paying dividends.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually entailing dividend payments before dividends are distributed to common stockholders.

Cash Flow

The total amount of money being transferred into and out of a business, particularly concerning liquidity.

Cash Flow Statement

A financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.