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</p> Signup and view all the answers

    What is a common use of government stocks?

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

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

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

    How does the government redeem debt?

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

    What is deficit financing used for?

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

    What is one of the sources of public debt?

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

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

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

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