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Page 1 CPT Section C General Economics Chapter 6 Unit 8 Manish Dua Page 2 CPT Section C General Economics Chapter 6 Unit 8 Manish Dua MCQ’s Page 3 CPT Section C General Economics Chapter 6 Unit 8 Manish Dua MCQ’s Q.1 Indian global ranking in the indebtedness (a) third (b) fifith (c ) sixth (d) ninth Answer. B Page 4 CPT Section C General Economics Chapter 6 Unit 8 Manish Dua MCQ’s Q.1 Indian global ranking in the indebtedness (a) third (b) fifith (c ) sixth (d) ninth Answer. B (a) Increased (b) Decreased (c) Constant (d) Negative Answer : ( b) Page 5 CPT Section C General Economics Chapter 6 Unit 8 Manish Dua MCQ’s Q.1 Indian global ranking in the indebtedness (a) third (b) fifith (c ) sixth (d) ninth Answer. B (a) Increased (b) Decreased (c) Constant (d) Negative Answer : ( b) (a) Providing loan (b) Paying loan (c) Returning Principal as well as Interest (d) None of the above Answer: (c)Read More
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FAQs on MCQ - External Debt - Business Economics for CA Foundation
| 1. What is external debt? |  |
Ans. External debt refers to the total amount of money that a country owes to foreign lenders. It includes both public and private sector debt and can be in the form of loans, bonds, or other financial instruments.
| 2. How is external debt measured? | |
Ans. External debt is measured using various indicators such as the total debt stock, debt-to-GDP ratio, and debt service ratio. These indicators help assess a country's ability to repay its debt and determine its creditworthiness.
| 3. What are the reasons for a country to have external debt? | |
Ans. Countries may have external debt for various reasons, including financing development projects, addressing budget deficits, importing goods and services, and stabilizing their currency. External debt can be seen as a way to access funds that are not available domestically.
| 4. What are the potential risks of high external debt? | |
Ans. High external debt can pose several risks to a country's economy. It can lead to increased vulnerability to economic shocks, higher interest payments, reduced government spending on public services, and limited access to credit in the future. Additionally, if a country is unable to repay its debt, it may face default and damage its credit rating.
| 5. How can a country manage its external debt? | |
Ans. Countries can manage their external debt through various strategies. These include implementing sound fiscal policies, promoting economic growth, diversifying their export base, attracting foreign investment, negotiating favorable loan terms, and monitoring debt sustainability. International financial institutions also play a role in providing assistance and advice on debt management.
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