The national debt may be repaid through:(a) A budget surplus;(b) A budget deficit;(c) Foreign aid;(d) Central Bank purchasing commercial banks.
Question
The national debt may be repaid through:(a) A budget surplus;(b) A budget deficit;(c) Foreign aid;(d) Central Bank purchasing commercial banks.
Solution
The national debt can be repaid through:
(a) A budget surplus: This is when the government's tax revenues exceed its expenditures. The surplus can be used to pay down the national debt.
(b) A budget deficit: This is when the government's expenditures exceed its tax revenues. This would not help to repay the national debt, but rather, it would increase it.
(c) Foreign aid: This is money, goods, or services given by one country to another. It is typically not used to repay the national debt, but rather to assist in development or disaster relief.
(d) Central Bank purchasing commercial banks: This is not a typical method for repaying national debt. The central bank may purchase commercial banks to stabilize the banking system, not to repay national debt.
So, the most feasible option to repay the national debt among these would be through a budget surplus.
Similar Questions
The national debt is equal to which of the following?ResponsesThe value of all government bonds held by the nation’s central bankThe value of all government bonds held by the nation’s central bankThe value of all loans in the nation’s banking systemThe value of all loans in the nation’s banking systemThe current government budget deficitThe current government budget deficitThe sum of all past government budget deficits and surplusesThe sum of all past government budget deficits and surplusesThe interest payments on the previous year’s government debt
__________ account deficit is financed by net capital flows from the rest of the world, thus by a capital account surplus.
Debt funding
What causes countries to form a national debt?A.Requiring lawmakers to pass budgets that create a surplusB.Borrowing money repeatedly to cover budget deficitsC.Increasing taxes on the poorest citizens in the countryD.Cutting funding to important programs like the militarySUBMITarrow_backPREVIOUS
With reference to Figures 1 and 2, explain the difference between a fiscal deficit and national debt.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.