Accumulating Debt Poses a Problem for the U

question 15

Multiple Choice

Accumulating debt poses a problem for the U.S.federal government because

• A)it is currently in danger of defaulting on on the debt.
• B)a large debt-to-GDP ratio causes crowding out.
• C)building roads and bridges do not yield enough benefits to justify their cost.
• D)the debt has to ultimately be paid off.

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Definitions:

Abrupt Price Drop

A rapid and significant decrease in the market price of a security or commodity.

Blanket Liens

A legal claim allowing a lender to seize nearly all of a borrower's assets if they default on a loan.

Chattel Mortgage

A loan arrangement in which an item of movable personal property acts as security for the loan, often used in the financing of vehicles and equipment.

Speculative Demand

The demand for a good or asset based on expectations of future price changes, rather than its intrinsic value or productive use.