Tag: public debt

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Questions Related to public debt

Multiple choice economics public debt public debt main feature of tax arbitration, tribunal adjudication and alternate dispute resolution

Public debt produces a deep impact on production of wealth in the country. As against this, private debt produces no such impact.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Public debt is often used for infrastructure and development, which impacts the production of wealth, whereas private debt is typically for consumption or specific business ventures.

Multiple choice economics public debt public debt main feature of tax arbitration, tribunal adjudication and alternate dispute resolution

External debt represents a claim of __________ against the real income (GNP) of the country.

  1. countrymen

  2. foreigners

  3. both A and B

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Public borrowings from other countries, are referred to as External Debt. External debt permits import of real resources. It enables the country to consume more than it produces. The sources of external debts are loans from foreign government, IMF, World Bank etc.

Multiple choice economics public debt public debt main feature of tax arbitration, tribunal adjudication and alternate dispute resolution

Which of the followings is/are the source/s of external debt?

  1. Loans and advances from foreign government

  2. From IMF, World Bank and International Financial Institutions

  3. From foreigners

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

External debt is sourced from international entities, foreign governments, and foreign individuals.

Multiple choice economics public debt public debt main feature of tax arbitration, tribunal adjudication and alternate dispute resolution

When is the public debt said to be unproductive?

  1. When government borrows for developmental expenditure so that it generates revenue

  2. When the public borrow for expenditure so that it generates revenue

  3. When government borrows for non-developmental expenditure such as war finance or extravagance in public administration

  4. When public borrow for expenditure such as extravagance
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Unproductive debt is debt incurred for purposes that do not generate future income or assets, such as war or administrative expenses.

Multiple choice economics public debt public debt main feature of tax arbitration, tribunal adjudication and alternate dispute resolution

Which of the following may be source/s of internal debt due to the nature of their operations?

  1. Reserve Bank of India

  2. Commercial and General Banks

  3. Through selling of Government Securities

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Internal debt is raised within the country through various financial institutions and the sale of government securities.

Multiple choice economics public debt public debt main feature of tax arbitration, tribunal adjudication and alternate dispute resolution

Which of the following is most likely to cause an increase in the size of the national debt?

  1. An increase in taxation

  2. A rise in long-term government borrowings

  3. An increase in national income

  4. A reduction in government expenditure.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

National debt increases when the government spends more than it earns, which is facilitated by long-term government borrowings.