It Is Likely That a Constitutional Amendment That Required the Government

question 34

Multiple Choice

It is likely that a constitutional amendment that required the government always to run a balanced budget would

• A)contribute to a more stable level of output.
• B)mitigate the crowding-out effect.
• C)eliminate the economy's automatic stabilizers.
• D)All of the above are correct.

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Definitions:

Conversion Premium

The additional cost over the par value at which a convertible security, like a bond or preferred stock, can be converted into common stock.

Pure Discount Bond

A type of bond that is issued at a discount to its face value and pays no interest but instead pays the face value at maturity.

Total Assets

The sum of all assets owned by a company, including cash, investments, property, and other resources.

Equity

Equity represents ownership interest in a company, reflected by the shares issued by the corporation, entitling shareholders to company profits.