When the Federal Government Is in Debt, It Follows That

question 100

True/False

When the federal government is in debt, it follows that it has a deficit.

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Definitions:

Interest-Bearing Note

A debt instrument that obliges the issuer to pay interest to the holder on the principal amount until maturity.

Forward Contracts

Financial derivatives that obligate the buyer to purchase, and the seller to sell, a particular asset at a predetermined future date and price.

Fair Value Hedge

A hedge of the exposure to changes in fair value of an asset or liability, or an unidentified firm commitment, that is attributable to a particular risk.

Cash Flow Hedge

A type of hedge that protects against the variability in cash flows arising from a particular risk, such as interest rate movements or currency fluctuations.