Answered: According to a recent study, people in…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter9: Public Finance And Public Choice

Section: Chapter Questions

Problem 6P

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According to a recent study, people in Missouri were 4 times more likely to file bankruptcy compared to people in South Carolina. What could be reasonable causes for the difference between these States?

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When a firm fails to maintain its financial obligations and repay its creditors, it goes bankrupt. A plea is submitted to the court, and every one of the firm's unpaid loans are assessed and paid out, if not in full, from the assets. Bankruptcy is a legal proceeding utilized by a firm to settle its financial obligations. Loans that are not completely paid to creditor are pardoned for the owners. Bankruptcy proceedings varies among nations and may also vary among states within the same country.

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