Types of public debt, Managerial Economics

Assignment Help:

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 obtained to enable a government to purchase some real assets, or Deadweight Debt where the debt is not covered by any real assets.

b.          National Debt:  can also be classified into marketable and non-marketable debt.  Marketable debt can be bought and sold on the money market or stock exchange.  It can be divided into two types, short and long-term.  The former consists of Treasury Bills and the latter of Government Bonds (Stocks).  Non-marketable debt cannot be sold on the money market or stock exchange and includes such items as National Savings certificates, various types of Bonds, and deposits at the National Savings Bank.

Finally, National debt can also be classified into Domestic and external debt.  Domestic public debt is owed by the state mainly to its citizens or to domestic institutions such as commercial companies, etc.  It includes interest payments on domestic institutions such as commercial companies, etc.  Interest payments on domestic debt are raised from the taxation of the community.  Such interest payments are transfer payments since the total wealth is not affected, irrespective of the size of the debt.  External debt is owed to foreign institutions and governments.  Kenya's external debt is incurred with two types of lenders:

i. Bilateral Lenders

This is official lending between two governments.  Chief among the lenders of Kenya in this category are the U. S. A., Britain and Japan.

ii.  Multi-lateral Lenders

This is lending from organizations comprising of many governments.  By for the leading lender is the World Bank (IBRD) - with two main lending affiliate bodies - the International Development Association (IDA) - the international Finance Corporation (IFC); and the International Monetary Fund, and since 1983, the African Development Bank (ABD).


Related Discussions:- Types of public debt

CASE LET, is indian companies running a risk by not giving attention to cos...

is indian companies running a risk by not giving attention to cost cutting?

BREAK EVEN ANALYSIS, WRITE A NOTE ON BREAK -EVEN ANALYSIS IN PROFIT MANAGEM...

WRITE A NOTE ON BREAK -EVEN ANALYSIS IN PROFIT MANAGEMENT

Bank rate , Bank Rate Bank rate is the rate at which the central bank ...

Bank Rate Bank rate is the rate at which the central bank gives loans to the commercial banks against the security of government and other approved first class securities. In

Implications for the shape of cost function, Q. Implications for the shape ...

Q. Implications for the shape of cost function? A cost function is also a mathematical relationship, one which relates the expenses an organisation incurs on the quantity of ou

Economic theory, How does economic theory contribute to managerial decision...

How does economic theory contribute to managerial decisions?

PRICE ELASTIC DEMAND, A cut in price from Br 1.50 to Br 1.20 leads demand f...

A cut in price from Br 1.50 to Br 1.20 leads demand for a product rise by 10% What would the price elastic of demand before this product ? interpret the result by identifying the t

Factors influencing exchange rates, Factors influencing Exchange Rates ...

Factors influencing Exchange Rates i.  Inflation:   Other things being equal, a country experiencing a high rate of inflation will experience a lower demand for its goods whil

Explain the role of inflation during inflation and deflation, A. Define inf...

A. Define inflation. Explain the role of inflation during inflation and deflation. B. Managerial economics is a form of economics for managers do you agrees? explain you comment

Disguised unemployment, Disguised unemployment Situation where some pe...

Disguised unemployment Situation where some people are employed apparently, but if they are withdrawn form this job, total production remains the same. In most developing coun

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