The Concern About Private Prisons Is That

question 69

Multiple Choice

The concern about private prisons is that:

• A) they will increase profits by cutting costs and lowering quality.
• B) they will charge taxpayers too much money by raising the prices of their services to monopoly levels.
• C) there is no incentive for them to be efficient.
• D) they might pay their staff above market wages, leading to a surplus of prison labor.

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Definitions:

Bondholder

A bondholder is an investor or entity that owns a bond issued by a borrower, entitling them to receive the bond's face value at maturity, along with periodic interest payments.

TIPS

Treasury Inflation-Protected Securities, which are U.S. government bonds that are indexed to inflation to protect investors from the negative effects of rising prices.

Coupon

The annual interest rate paid by a bond, expressed as a percentage of the face value, or the actual amount paid out to a bondholder annually.

Inflation

The rate at which there's an upward movement in the general price level of goods and services, weakening the purchasing capacity.