Corporate Bonds Best
September 8th, 2010 | 
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Question: economics..help please!?
i'm currently taking an economics class & kind of struggling..just a couple questions i have about it. anyone can help me out thanks!
-how would you best describe how money is added to our economy?
-any examples of a liquidity crunch
-what exactly are dividends?
-why do treasury bonds typically have lower coupon rates than Corporate Bonds?
-what best describes a budget deficit?
-what would cause a budget surplus?
-which tax is most regressive?
-what is the largest component of GDP?
Answer: money is added to our economy through spending.
A liquidity crunch is a business condition that results in having too little cash and other current assets to be able to pay current liabilities as the liabilities mature. A liquidity crunch is a timing issue: not having enough liquidity can force you to make an emergency borrowing at a less than favorable interest rate.
Dividends are payments to the company by the shareholders.
Treasury bonds have lower rates to be more lucrative to buyers
A budget deficit is when the government spends more money than they are taking in.
A budget surplus is the opposite, the government is taking in a lot of money and is spending minimal.
the largest component of GDP is personal consumption
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