Why Is It Important to Judge an Economy's External Debt

question 104

Essay

Why is it important to judge an economy's external debt relative to its assets? (Remember: an internal debt creates an equal amount of financial assets. )Give an example to support your explanation.

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Definitions:

Fair Values

The monetary amount expected from selling an asset or required to cover a liability, in a well-organized deal among market stakeholders, at the time of assessment.

Control

The power to govern the financial and operating policies of an organization so as to obtain benefits from its activities.

Investee

A company or entity in which an investor holds an interest, typically through ownership of shares.

Acquisition Cost

The total cost associated with acquiring an asset or investment, including the purchase price and all related expenses.