Which of the Following Federal Government Actions Would Make Sense

question 98

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:

WACC Calculation

The process of determining a company's Weighted Average Cost of Capital, incorporating the costs of equity, debt, and any other forms of financing.

Semiannually

Occurring twice a year, generally used in the context of payments, interest accruals, or reports.

CAPM

Capital Asset Pricing Model, a theory that describes the relationship between systematic risk and expected return for assets.

Target Capital Structure

The mix of debt, equity, and other financing sources a company aims to use to fund its operations and growth.