government spending and large tax increases, in order to reduce their deficits. Greece, Ireland, Spain, and Portugal

all had to undertake relatively severe austerity measures. The ramifications of this crisis have spread. Economists

even called into question the euro’s viability.

Access for free at openstax.org
17 • Key Terms 429

Key Terms

actual rate of return the total rate of return, including capital gains and interest paid on an investment at the

end of a time period

bond a financial contract through which a borrower like a corporation, a city or state, or the federal

government agrees to repay the amount that it borrowed and also a rate of interest over a period of time in

the future

bond yield the rate of return a bond is expected to pay at the time of purchase

bondholder someone who owns bonds and receives the interest payments

capital gain a financial gain from buying an asset, like a share of stock or a house, and later selling it at a

higher price
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