Government Purchases Include All of the Following EXCEPT

question 103

Multiple Choice

Government purchases include all of the following EXCEPT

• A) pension benefits paid by the federal government.
• B) the construction of a new courthouse built by a local government.
• C) the salary paid to an elementary school teacher employed by a local public school board.
• D) the purchase of new military hardware by the Canadian Forces.
• E) the construction of new highways by provincial governments.

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Definitions:

Longer-Duration Bonds

Fixed-income securities with extended time frames to maturity, typically exposing investors to higher interest rate risk but potentially offering higher yields.

Shorter-Duration Bonds

Bonds with a near-term maturity date, typically less sensitive to interest rate changes and offering less yield compared to longer-duration bonds.

Yield To Maturity

The total return anticipated on a bond if it is held until its maturity date, including all interest payments and the repayment of principal.

Bond's Duration

Bond's duration measures the sensitivity of the bond's price to changes in interest rates, often indicating the average time it takes for a bond to repay its true cost.