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If the Debt Is Financed Externally,then the Burden Is Incurred

question 128

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If the debt is financed externally,then the burden is incurred when the debt is financed.
The debt held by foreign households and institutions is known as the external debt.At the time the debt is sold externally,there are no opportunity costs.Instead of having to move along the production possibilities curve,external borrowing allows us to consume beyond the production possibilities curve.


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