Suppose the Issuer of a Bond Fails to Pay Some

question 112

Multiple Choice

Suppose the issuer of a bond fails to pay some of the interest or principal that was promised to the bondholders.This failure is referred to as a

• A)breach.
• B)default.
• C)risk.
• D)term failure.

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Definitions:

Governmental Assistance

Financial support or aid provided by the government to individuals, businesses, or other governmental entities.

Automatic Stabilization Policies

Economic policies and programs that automatically adjust government spending or taxes in response to economic changes, without the need for additional legislative action.

Aggregate Demand

The combined need for all commodities and services in an economy, quantified at a set price level and within a specific period.

Federal Budget Surplus

A situation where the government's income exceeds its spending, resulting in excess funds for a given fiscal period.