Which of the Following Is Not an Argument in Favor

question 14

Multiple Choice

Which of the following is not an argument in favor of requiring the government to balance its budget?

• A)Government debt imposes higher taxes or more borrowing on future generations.
• B)A balanced budget will smooth the business cycle.
• C)Deficits lower national saving.
• D)Recent history shows that Congress will run deficits even when deficits are not justified by war or recession.

Recognize the purpose and impact of special mechanisms in equity issuance, including rights offers, standby underwriting, and Dutch auction underwriting.

Understand the concepts associated with private placements, public issues, and the transition from private to public ownership.

Identify key terms and concepts related to the secondary market, including lockup agreements, holder-of-record date, and underpricing phenomena.

Analyze the rationale behind firms opting for equity offerings over debt issuances despite the cost implications.

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Definitions:

Beneficiaries

Individuals or entities entitled to receive benefits or assets under the terms of a will, trust, insurance policy, or other financial instrument.

Auto Accident

An auto accident refers to a collision involving one or more vehicles, often resulting in property damage, injury, or death.

Permanently Disabled

A condition where an individual is unable to engage in any substantial gainful activity due to a physical or mental impairment that can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months.

Guaranteed Insurability

An optional provision in an insurance contract that allows the insured to pay an extra premium initially in exchange for a guaranteed option to buy more insurance at certain specified times later on with no questions asked and no medical examination required.