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
Explain Managerial economics according to Mote and Paul Haynes, Mote and Paul:  "Managerial economics refers to those characteristics of economics and its tools of analysis mos

Q. Construction of an explanatory model? Construction of a sample:   To apply multiple regression a large sample is generally essential (ideally between 2,000 to 15,000 indivi


The Circular Flow of Income and Expenditure This is an economic model illustrating the flow of payments and receipts between domestic firms and domestic households. The househo

Market demand and consumers surplus Suppose that the market price of a cup of coffee is K£4 but the consumer was willing to pay £9 for the first unit, £8 for the second, £7 fo

Shifts in the supply curve Shifts in the supply curve are brought about by changes in factors other than the price of the commodity. A shift in supply is indicated by an entir

Q. Avoiding Surplus and Inadequate Production? Demand forecasting is essential for the new and old organisations. It is somewhat necessary if an organisation is engaged in larg

INDIRECT TAXES These are imposed on an individual mostly producers or traders but they can be passed on to be borne by others usually the final consumers.  They can also be de

break event point

Based on the information given in the Canada Health Act as well as the information given in your Study Guide, write a description of how medical services are funded in Canada. Be s