If the Federal Government Fails to Reduce the Nation's Debt

question 24

Multiple Choice

If the federal government fails to reduce the nation's debt relative to income,

• A)it will become easier to borrow in the global credit markets.
• B)the interest expenses on the outstanding debt will increase.
• C)the cost of holding outstanding debt will decrease.
• D)it will be easier to cover the interest on outstanding debt with tax revenues.

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Definitions:

EBIT

Stands for Earnings Before Interest and Taxes, a financial metric that calculates a company's profitability from its core operations, excluding the effects of financing and tax environments.

Taxes

Compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Packing Machines

Equipment used in various industries for the purpose of packaging products into containers, bags, or other formats for distribution.

Operating Cost

Expenses associated with the day-to-day functions of a business, including costs for goods, services, and administration.