Which of the Following Federal Government Actions Would Make Sense

question 76

Multiple Choice

Which of the following federal government actions would make sense if a tax system fails to provide sufficient tax revenue?

• A)Only issue treasury bonds.
• B)Only cut funding to various federal projects.
• C)Only increase federal spending.
• D)Issue treasury bonds and cut funding to various federal projects but not increase federal spending.
• E)None of the choices are correct.

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Definitions:

MIRR

Modified Internal Rate of Return, a financial metric that addresses some of the limitations of the traditional internal rate of return by taking into account different financing and reinvestment rates.

Mutually Exclusive

Conditions or options that cannot occur or be chosen at the same time, requiring a choice to be made between them.

Internal Rate

Often refers to the internal rate of return (IRR), a metric used in capital budgeting to estimate the profitability of investments.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.