Which of the Following Statements Is True

question 51

Multiple Choice

Which of the following statements is true?

• A) State and local governments cannot default on their bonds.
• B) Bonds issued by state and local governments are called municipal bonds.
• C) All government issued bonds - local, state, and federal - are federal income tax exempt.
• D) The coupon payment on municipal bonds is usually higher than the coupon payment on Treasury bonds.

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Definitions:

Bureaucracy

An organizational structure characterized by standardized procedure, hierarchy of authority, and a clear division of labor, often within governmental agencies.

Capitalism

A financial system in which commerce, business, and resources are primarily or wholly owned and managed by private individuals for monetary gain.

Socialism

A political and economic theory advocating for the means of production, distribution, and exchange to be owned or regulated by the community as a whole.

Manufacturing

The process of producing goods using labor, machines, tools, and chemical or biological processing or formulation.