Economists Generally Do Not Agree to Limit the Private and Voluntary

question 20

Multiple Choice

Economists generally do not agree to limit the private and voluntary actions of people, but in the case of gambling, economists will admit that gambling

• A)is fun.
• B)teaches people about statistics.
• C)has external costs, so regulation could be justified for that reason.
• D)is immoral, so it must be prohibited.

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Definitions:

Bond Discount

The financial difference that arises when a bond is sold for an amount below its official face value.

Straight-line Method

A technique for determining depreciation or amortization by uniformly distributing the asset’s cost throughout its lifespan.

Unamortized Discount

The portion of a bond discount that has not yet been amortized to interest expense over the bond's life.

Redeemed

The act of exchanging a financial security, such as a bond, for its cash value before or at its maturity date.