A Developing Country Does Not Have Enough Taxes to Cover

question 44

Multiple Choice

A developing country does not have enough taxes to cover its expenditures and is unable to borrow.This government would be most likely to cover its deficit by

• A)purchasing government bonds from the public.
• B)selling government bonds to the public.
• C)selling newly issued government bonds directly to the central bank.
• D)buying newly issued government bonds directly from the central bank.

---

Definitions:

Agency Costs

Costs that arise from conflicts of interest between principals (owners) and agents (managers), including monitoring and incentive expenses.

Background Checks

The process of verifying the personal, financial, and criminal history of an individual, commonly undertaken by employers.

Time Clocks

Devices used to track the hours worked by employees, often by punching a card or logging in digitally.

Incentivize Employees

Offering rewards or benefits to motivate workers and enhance their performance.