3. What does a negative clause do?

A. It forces the issuer to establish a sinking fund to redeem bonds as they come due.

B. It prohibits the issuing of any further bonds without the permission of the existing bondholders.

C. It prevents a bond issuer from issuing new debt with seniority over current debt.

D. It prevents a bond issuer from calling bonds without paying a premium to the bondholders.

11. Which of the following is best described by a situation of rapid income growth, low unemployment and low inflation?

A. Trough

B. Recession

C. Bubble

D. Goldilocks scenario

17. Which of the following statements is the best description of a budget deficit?

A. When government expenditures exceed tax revenue

B. When government income exceeds government expenditures

C. When nominal government revenues exceed real government revenues

D. When GDP exceeds tax revenue