In Order to Finance the U

question 192

Multiple Choice

In order to finance the U.S.current account deficit,we must

• A)increase the income tax rate.
• B)increase government spending.
• C)run a surplus in the capital account.
• D)decrease the income tax rate.

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Definitions:

Call Option

A finance-related contract granting the buyer the privilege, rather than a requirement, to buy an asset at a fixed price within a set period.

Risk-Free Bond

A debt security that is assumed to have no risk of default, typically issued by a government with a stable financial outlook, allowing investors to predict with a high degree of confidence their return on investment.

Maturity Date

The date on which a financial obligation or investment becomes due for payment.