When a Government Undertakes a Significant Reduction in Government Recurrent

question 22

Multiple Choice

When a government undertakes a significant reduction in government recurrent expenditure this is known as:

• A) fiscal recession.
• B) fiscal constraint.
• C) matching principle.
• D) capital expenditure shortfalls.

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Definitions:

Issuing Equity

The process by which a corporation sells new shares of stock to investors to raise capital.

Rights Offer

A proposition by a company to its existing shareholders to purchase additional shares directly from the company at a specified price for a certain period.

Syndicated Loans

Large loans structured, arranged, and administered by a group of lenders, typically for significant projects or corporate financing needs.

Dilution

The reduction in the ownership percentage or value of a shareholding due to the issuance of more shares by the company.