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FEDERAL DEFICIT: An excess of federal government spending over tax collections. The federal deficit has been the subject of on-again, off-again debates among vote-seeking politicians and pointy-headed economists for a number of years. The main points of the debate are: (1) the potential crowding out of investment in capital goods, (2) the use of borrowed funds for either "consumption" or "investment" government purchases, and (3) the constraints imposed on fiscal policy. The jury of pointy-heads remains undecided on these issues.

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RISK

The quantitative probability of different future outcomes occurring. The assignment of probabilities can be subjective (based on a "feeling") or objective (based on historical data). Risk is related to the concept of uncertainty, which is simply not knowing what the future holds. People have three alternative preferences when confronting risk -- risk aversion, risk neutrality, and risk loving. Risk aversion is key to the provision of insurance.

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ORANGE REBELOON
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Today, you are likely to spend a great deal of time strolling through a department store wanting to buy either a green fountain pen or a handcrafted bird house. Be on the lookout for high interest rates.
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The earliest known use of paper currency was about 1270 in China during the rule of Kubla Khan.
"If you wouldn't write it and sign it, don't say it."

-- Earl Wilson, Columnist

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American Air Export and Import Company
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