External Debt Rises from 5 Percent of GDP to Over

question 65

Multiple Choice

External debt rises from 5 percent of GDP to over 30 percent of GDP.This increase in external debt:

• A)is not a potential problem because repayment does not imply a net reduction in the income of an average citizen.
• B)is not a potential problem because government debt differs from the debt of individuals.
• C)is a potential problem because government debt is no different from the debt of individuals.
• D)is a potential problem because repayment implies a net reduction in the income of an average citizen.

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Definitions:

Equilibrium Price

The price at which the quantity of goods demanded by consumers equals the quantity of goods supplied by producers, resulting in market balance.

Fine

Fine refers to a monetary penalty imposed as punishment for an offense or violation, often used by governments or regulatory bodies to enforce laws and regulations.

Industry Demand

The total demand for products or services within a particular industry or sector.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, leading to a state of market balance.