National debt, Managerial Economics

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.

Posted Date: 11/30/2012 4:15:46 AM | Location : United States







Related Discussions:- National debt, Assignment Help, Ask Question on National debt, Get Answer, Expert's Help, National debt Discussions

Write discussion on National debt
Your posts are moderated
Related Questions
A Retention bonus is an incentive paid to a key employee to retain them by a critical business cycle. This could be a transitional period (like mergers and acquisitions) to ensure

A firm producing hockey sticks has a production function given by X = 2 KL In the short-run, the firm's amount of capital equipment is fixed at K = 1000. The rental rate fo

Determine the Application of managerial economics Application of managerial economics isn't restricted to profit-seeking business organisations. Tools of managerial economics

a) What do you understand by equilibrium National Income and to what extent is economic growth beneficial to an economy? b) Explain using both diagrams and mathematical tools,

Q. Production Planning in demand forecast period ? Long term production planning can assist the management in organising long term finances on practical terms and conditions. S

Features of Planned Economy The command economies relies exclusively on the state.  The government will decide what is made, how it is made, how much is made and how distribut

Determine the Income Effect of law of demand As a result of fall in the price of a commodity, real income of its consumer increase at least in terms of this commodity. Or we c

The acme paper company lowers its price of envelopes (1000 count) from $6to $5.40.

What is Managerial economics according to Spencer and Siegelman Spencer and Siegelman:  Managerial economics is "the integration of economic theory with business practice for t

explian williomson model of managerial discretion