Burden of the national debt, Managerial Economics

Burden of the national debt

The extent of the burden on a nation of public debt, depends in the first place on whether it is an external or an internal debt.  The burden of the national debt to the community can be approximated by the cost of serving it.  The cost of servicing the public debt can be calculated:

i.   Per head of the population, or

ii.  As a percentage of government revenue, or

iii.  As a percentage of the national income.

Whichever method used, the National debt shall have the following burden on society:

  • If higher taxation is required to service a debt which might have disincentive effects resulting in a lower level of output, then this is a burden.
  • If the debt is held by foreigners, goods will need to be exported to pay the interest and possible repayment of capital. This part of the debt will involve a great burden.
Posted Date: 11/30/2012 4:16:50 AM | Location : United States







Related Discussions:- Burden of the national debt, Assignment Help, Ask Question on Burden of the national debt, Get Answer, Expert's Help, Burden of the national debt Discussions

Write discussion on Burden of the national debt
Your posts are moderated
Related Questions
real GDP is increasingly criticized for its alleged failure to adequately measure the standard of living. To what extent do you think this criticism is valid?

Theories of wage determination Early theories about wages The earliest theories about wage determination were those put forward by Thomas Malthus, David Ricardo and Karl

How can a firm''s security policies contribute and relate to the six main business objectives.give example


Properties of Indifference Curves An indifference curve is usually convex to the origin. Indifference curves slope downwards from left to right. A set

Function of Money Markets The money markets are the place where money is "wholesaled".  As such the supply of money and interest rate which are of significance to the whole ec

Explain the concept of externality in economics? Give one example of a positive and a  negative externality in Australia.

Thinking about modifications in the model again: Go back to the original model again, but add a marginal propensity to invest, this is, suppose  that I = f ( i and Y). The MPI is d

The Market Demand Curve Quantity of a commodity that an individual is willing to buy at a particular price of the commodity during a specific time period, given his money incom

MONOPOLISTIC PRACTICES The following practices may be said to characterize monopolies. Exclusive dealing to supply and collective boycott Producers agree to supply onl