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Internal Debt, Public finance Video Lecture | Public Finance - B Com
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FAQs on Internal Debt, Public finance Video Lecture - Public Finance - B Com
| 1. What is internal debt in public finance? |  |
Ans. Internal debt refers to the borrowing of funds by a government from its own citizens or entities within its own country. It is a form of government debt that is owed to individuals, businesses, financial institutions, or other government agencies within the country.
| 2. How is internal debt different from external debt? | |
Ans. Internal debt and external debt differ in terms of the creditors involved. Internal debt is borrowed from individuals or entities within the country, while external debt is borrowed from foreign entities or international financial institutions. Internal debt is denominated in the country's own currency, whereas external debt is denominated in foreign currency.
| 3. What are the sources of internal debt in public finance? | |
Ans. The sources of internal debt in public finance can include the issuance of government bonds, treasury bills, savings bonds, or loans from domestic financial institutions. These sources provide the government with the necessary funds to finance its budget deficits or undertake infrastructure projects.
| 4. How does internal debt impact a country's economy? | |
Ans. Internal debt can have both positive and negative impacts on a country's economy. On one hand, it can stimulate economic growth by providing funding for public investments and infrastructure development. On the other hand, a high level of internal debt can lead to increased interest payments, crowding out private investment, and potentially creating financial instability.
| 5. What are the implications of internal debt on future generations? | |
Ans. The implications of internal debt on future generations depend on how it is managed. If the borrowed funds are utilized for productive investments that generate long-term economic benefits, future generations may inherit a stronger economy. However, if the internal debt is mismanaged or used for non-productive purposes, future generations may bear the burden of repaying the debt without reaping the benefits of the borrowed funds. It is crucial for governments to carefully consider the long-term consequences of internal debt on future generations.
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Nov 16, 2024 Last updated |
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