Correct the Payment Made to a Public Official Under the Table

question 77

Multiple Choice

Correct. The payment made to a public official under the table is not included in GDP calculations. See 12-7: Problems with GDP as a Measure of Economic Welfare​

• A)GDP comparisons between the countries will overstate the economic welfare of country A compared with that of B
• B)GDP comparisons between the countries will understate the economic welfare of country A compared with that of B
• C)Country B will take twice as much time to double its rate of economic growth as Country A
• D)Country A will have a better chance to enforce property rights than does Country B
• E)Country A will take twice as much time to double its rate of economic growth than does Country B

---

Definitions:

Financial Covenants

Agreements between a borrower and lender setting specific financial ratios or milestones the borrower must maintain.

Minimum Financial Tests

Financial benchmarks or ratios a company must achieve or maintain to comply with certain agreements, often related to debt covenants.

Borrower Must

Obligations or conditions a borrower needs to fulfill as per the terms of the loan agreement.

Debt Covenants

Specific agreements entered into by a borrower and lender, included in the terms of a loan or bond issuance, which place restrictions on the borrower to protect the lender.