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

Un''s integrated programme for commodities, The UN's Integrated Programme f...

The UN's Integrated Programme for Commodities Most of the political pressure for ICAs comes from spokesmen for the developing countries.  This is reflected in countless resolu

What is the nature of commodity, Q. What is the Nature of Commodity ? T...

Q. What is the Nature of Commodity ? The nature of a commodity as well has an effect on the price elasticity of its demand. Commodities can be characterised ascomforts, luxurie

Availability of substitutes - determinants of demand, Q. Availability of Su...

Q. Availability of Substitutes - Determinants of Demand? One of the most important determinants of elasticity of demand for a commodity is availability of its substitutes. Clos

Determine the elasticity of demand, Elasticity of Demand As the law of ...

Elasticity of Demand As the law of demand establishes a relationship between quantity demanded and price for a product, it doesn't tell us exactly as how weak or strong the rel

Scarcity and oppotunity cost, how manager can apply scarcity and oppotunity...

how manager can apply scarcity and oppotunity cost in managerial decision making

Definition of perfect competition, 1. Prof. Marshall 'The more nearly perfe...

1. Prof. Marshall 'The more nearly perfect a market is, the stronger is the tendency for same price to be paid for same thing at the same time in all parts of the market". 2. Pr

Law of demand, explain the law of demand. briefly discuss the exception to ...

explain the law of demand. briefly discuss the exception to the law of demand

Analysis of consumer demand, Part A : Select one of the following economic...

Part A : Select one of the following economic issues and discuss how it impacts on your organisation. Analysis of consumer demand Cost analysis Market structure and

What are the different channels of monetary policy, Question 1: a. What...

Question 1: a. What are the different channels of monetary policy? b. Discuss why the channels of monetary policy are likely to change in the wake of financial liberaliz

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