Government Stocks and Bonds

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Questions and Answers

What is the primary purpose of issuing development stocks?

  • To finance government expenditure
  • To finance development projects or plans (correct)
  • To manage budget surpluses
  • To control domestic inflation rates

Who are the principal investors in development stocks?

  • Individual investors and hedge funds
  • Foreign investors and multinational corporations
  • Insurance companies, commercial banks, and Central Bank (correct)
  • Government agencies and non-profit organizations

What is the primary source of repayment for revenue bonds?

  • Revenue generated from the project being financed (correct)
  • Government budget allocations
  • Donations from private organizations
  • Tax revenues

What is a major cause of the rapid increase in domestic debt?

<p>Need to finance government budget deficit (B)</p> Signup and view all the answers

What is a common use of government stocks?

<p>To finance economic development projects (C)</p> Signup and view all the answers

Which of the following is a characteristic of development stocks?

<p>Long-term maturity with yields increasing with maturity (C)</p> Signup and view all the answers

What has become a rare phenomenon in recent times due to increasing public expenditure?

<p>Surplus budget (A)</p> Signup and view all the answers

How does the government redeem debt?

<p>By buying up loans from the market (D)</p> Signup and view all the answers

What type of internal public debt is contracted through financial instruments?

<p>Internal debts contracted through financial instruments (C)</p> Signup and view all the answers

What is the purpose of government borrowing from the economy?

<p>To alter the position of economic variables (C)</p> Signup and view all the answers

What is reflected in the rapid increase in domestic debts?

<p>The rapidity of debt procurement to finance projects (B)</p> Signup and view all the answers

What arises when payments to contractors and suppliers are delayed or remain unpaid by the government due to lack of funds?

<p>Trade-related debts (D)</p> Signup and view all the answers

What happens when a government's revenue exceeds its spending in a financial year?

<p>A budget surplus occurs (C)</p> Signup and view all the answers

What is one of the objectives of public debt in relation to economic conditions?

<p>To fight against depression (A)</p> Signup and view all the answers

What is deficit financing used for?

<p>To bridge the budget deficit (C)</p> Signup and view all the answers

What is one of the sources of public debt?

<p>External borrowing (A)</p> Signup and view all the answers

What is one of the objectives of public debt in relation to economic development?

<p>To finance economic development (D)</p> Signup and view all the answers

What is one of the areas where public debt can be used?

<p>Financing public enterprises (B)</p> Signup and view all the answers

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