The Sum of Past Budget Deficits Minus the Sum of Past

question 22

Multiple Choice

The sum of past budget deficits minus the sum of past budget surpluses refers to

• A) the national debt.
• B) the cyclically unbalanced budget.
• C) the structural national debt.
• D) the federal government net worth.

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Definitions:

Equity

The value of an asset after deducting the amount of all liabilities on that asset. In investing, it often refers to the ownership interest held by shareholders in a corporation.

Firm's Debt

The total amount of money a company owes to creditors, including loans, bonds, and other forms of debt.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk of financial loss.

Call Option

An agreement that grants the purchaser the option, not the compulsion, to acquire an asset at a predetermined price during a defined timeframe.