Debtors Are Considered Insolvent If They Are Unable or Fail

question 7

True/False

Debtors are considered insolvent if they are unable or fail to pay their debts as they become due.

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Definitions:

Automatic Stabilizers

Economic policies and programs designed to offset fluctuations in a nation's economic activity without additional government intervention.

Recession

A noticeable drop in economic activity that affects the entire economy, enduring beyond several months, usually evidenced in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Transfer Payments

Payments made by the government to individuals, without the government receiving any goods or services in return.

Nondiscretionary Fiscal Policy

involves government policies, like taxation and certain types of government spending, that are not easily altered and automatically adjust to economic conditions.