Which of the Following Federal Government Actions Would Make Sense

question 76

Multiple Choice

Which of the following federal government actions would make sense if a tax system fails to provide sufficient tax revenue?

• A)Only issue treasury bonds.
• B)Only cut funding to various federal projects.
• C)Only increase federal spending.
• D)Issue treasury bonds and cut funding to various federal projects but not increase federal spending.
• E)None of the choices are correct.

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Definitions:

Interest-Bearing Note

A debt instrument that pays interest to the holder, usually at a fixed rate, until the principal is repaid.

Face Value

The nominal or original value printed on a financial instrument, such as a bond or stock certificate.

Notes Payable

Notes payable are written agreements where a borrower agrees to pay back the principal amount along with interest to a lender at a future date.

Accrued Interest

Accrued Interest is the interest that has accumulated on a bond or loan since the last interest payment date but has not yet been paid.