Eventually,external Debt Must Be Repaid with the Export of Real

question 57

True/False

Eventually,external debt must be repaid with the export of real goods and services.
External financing temporarily eliminates the opportunity cost of financing increased government expenditures.At some point,foreign debt holders will want to collect their bills.To do this,they will cash in (sell)their bonds,and then use the proceeds to buy U.S.goods and services.When this happens,the United States will be exporting goods and services to pay off its debts.

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Definitions:

Restated

Adjusting previously reported financial information to correct errors or to reflect more accurate and up-to-date accounting information.

Functional Currency

The main currency used by a business or unit within a company, reflecting the economic environment in which it primarily operates.

Consolidated Balance Sheet

A financial statement that presents the assets, liabilities, and equity of a parent company and its subsidiaries as one entity.

U.S. Dollars

The currency of the United States, used as the standard monetary unit.