A Ponzi Spending Unit Is a Spending Unit

question 62

Multiple Choice

A Ponzi spending unit is a spending unit

• A)where the anticipated revenues significantly exceed the anticipated payment obligations.
• B)is one in which the funds coming in may potentially fall short of the payment outflows if there is an increase in interest rates.
• C)must continuously increase its outstanding debt to meet its current obligations or payments.
• D)None of the above is correct.

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Definitions:

Equitable Estoppel

A legal defense tool that prevents a party from taking back a promise or from arguing against facts they previously admitted to, when another party has relied on that promise or those facts.

Legal Obligation

A duty enforced by law, requiring an individual or entity to conform to certain conduct or to refrain from certain actions.

Gratuitous Promise

A promise made without expecting anything in return, which is generally not enforceable in contract law unless it is made in a deed.

Existing Duty

An obligation that is currently in effect under the law or within the terms of a contract.