During an Especially Difficult Year of Weakening Financial Conditions, the Government

question 22

Multiple Choice

During an especially difficult year of weakening financial conditions, the government of Geriva, a European nation, borrows money to meet its legal obligations. However, once the borrowed amount reaches a certain limit, the government is not allowed to borrow more money. This is because the government has hit the _____.

• A)fiscal cliff
• B)reserve requirement
• C)debt ceiling
• D)price ceiling

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Definitions:

Cumulative Voting

Procedure where a shareholder may cast all votes for one member of the board of directors.

Board Of Directors

A group of individuals elected by shareholders to oversee the management and make major decisions for a corporation.

Shares Of Stock

Units of ownership interest in a corporation that give the owner a share in the company's profits and voting rights.

Market Rate

The prevailing interest rate available in the marketplace for similar financial instruments or loans.