National debt, Managerial Economics

Assignment Help:

NATIONAL DEBT

Taxation does not often raise sufficient revenue for the Government Expenditure.  So, governments resort to borrowing.  This government borrowing is called Public debt or National debt, it thus refers to the government total outstanding debt.  This debt increases whenever the government runs a deficit for then it has to borrow to pay for the excess of expenditure over taxes and other receipts.

Public Debt is undertaken basically for two reasons:

a.           Given the scarcity of our resources, it is necessary for the government to borrow funds in order to speed up the process of economic development.

b.          Export earnings of foreign exchange usually fall short of the needed outlays for imports.  In order to cover this foreign exchange deficit on transactions, it is necessary for the government to borrow from abroad.  In the short-run therefore, the external debt is incurred to finance balance of payment deficits.  These deficits are incurred in the course of importing vital consumers and producer goods and services.


Related Discussions:- National debt

Trade cycle-hawtrey views, Hawtrey views about Trade Cycle Hawtrey view...

Hawtrey views about Trade Cycle Hawtrey views trade cycle as a purely monetary phenomenon. According to him, inventory cycles result from fluctuations caused in the desired rat

Types of public debt, Types of Public Debt Public debts can be classif...

Types of Public Debt Public debts can be classified according to the purpose for which the money was borrowed into; a.           Reproductive Debt:  where a loan has been

Managerial economics according to mote and paul, Managerial economics accor...

Managerial economics according to Mote and Paul "Managerial economics refers to those aspects of economics and its tools of analysis most relevant to the firm's decision-making

Bertrand equilibrium benefits, The computer graphics chip industry is one w...

The computer graphics chip industry is one with a little number of competitors that earn normal economic profit. Two chip manufacturers, NVIDIA and ATI both face the prospect of lo

Does capital inflow lower us interest rates, Basic textbook models, such as...

Basic textbook models, such as the Mundell-Fleming model, say that capital inflow happens due to the domestic interest rate being higher than the world interest rate, and therefore

Scarcity, What is the role of scarcity in management decisions-making

What is the role of scarcity in management decisions-making

Measures to control inflation, Measures to control inflation An inflat...

Measures to control inflation An inflationary situation can effectively be addressed/tackled if the cause is first and foremost identified.   Governments have basically three

Nominal rigidities versus real rigidities, NOMINAL RIGIDITIES VERSUS REAL R...

NOMINAL RIGIDITIES VERSUS REAL RIGIDITIES    Nominal rigidities are said to exist when nominal prices and wages  do  not change in  the  face  of  conditions that call for thei

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd