Macaulay Tells Us That "On Such Grounds of Reasoning, There

question 67

Essay

Macaulay tells us that "On such grounds of reasoning, there will be found no insuperable objections to those propositions of Dr. Price, which are so highly censured by Mr. Burke, as containing principles of the most seditious and dangerous nature; even though we should allow that every government which accords with the opinions and the inclinations of the large majority of the people, is, in an high sense of the term, a legitimate government." Do you agree with Macaulay? Explain your answer.

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Definitions:

Treasury Bond

A long-term government debt security with a fixed interest rate and maturity of more than ten years.

Treasury Bond

Long-term, fixed interest government debt securities with a maturity of more than ten years.

STRIPPED Cash Flows

Cash flows from financial instruments that have been separated from their financial structure, often used in securitization.

Arbitrage

The practice of taking advantage of a price difference between two or more markets, striking a combination of matching deals that capitalize upon the imbalance.