Adam Smith Noted That When Public Expenditures Are Undertake for the General

question 7

Multiple Choice

Adam Smith noted that when public expenditures are undertake for the general benefit of everyone in a society then _____.

• A)there is considerable conflict between the benefit principle and the ability-to-pay principle
• B)there is no conflict between the benefit principle and the ability-to-pay principle
• C)the benefit principle provides little guide to tax policy
• D)the ability-to-pay principle provides little guide to tax policy

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Definitions:

Treasury Debt

Government-issued bonds to finance government spending, considered low-risk investments.

Mortgage-Backed

Mortgage-backed refers to securities that are secured or backed by mortgage loans, allowing investors to receive payments derived from the principal and interest payments made by borrowers.

Money Market

The section of the financial market dealing with the lending and borrowing of short-term funds, including treasury bills, commercial paper, and certificates of deposit.

Repurchase Agreements

Short-term loans where a borrower sells securities to a lender with an agreement to buy them back at a higher price at a future date.