Which of the Following Is a Consequence of a Growing

question 30

Multiple Choice

Which of the following is a consequence of a growing federal budget deficit in the United States?

• A)A decrease in the federal debt outstanding
• B)An increase in the federal debt outstanding
• C)A decrease in the portion share of federal government expenditures that must be allocated to interest in the future
• D)An increase in national saving

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Definitions:

Put Option

A financial contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specified time frame.

Exercise Price

The sum for which the bearer of an option has the privilege to acquire (with a call option) or dispose of (with a put option) the foundational asset.

Stock Price

The cost of purchasing a share of a company's stock, reflecting the market's valuation of the company at any given time.

Call Option

A contract which allows an investor the option, without being required, to purchase a stock, bond, commodity, or any other financial instrument at a predetermined price during a certain time frame.