Which of the following is an example of external debt for the United States? A)

Question

Which of the following is an example of external debt for the United States? A) A loan made by Citibank to the govenment of Mexico B) A purchase of Apple stock by a person in Canada C) A loan made in yen to a company in the United States D) A purchase of U.S. Treasury bills by the Bank of Japan ) Which of the following is NOT a problem with excessive debt? A) It worsens the central government's budget position by adding large debt service payments to other budget items. B) It reduces the quantity of resources available to invest in economic development. C) It can reduce the chance of a crisis. D) If debt service is substantial, schools, health clinics, roads, ports, other infrastructure, and social needs are less likely to be addressed. 20) Which of the following is FALSE? A) Loans from abroad add to a country's stock of external debt and generate debt service. B) Current account deficits must be financed through inflows of capital. C) Borrowed funds are always used in a manner that contributes to the expansion of the country's productive capability D) Debt service can become an unsustainable burden that holds back development. 21) The international investment position is defined as A) the total of all domestic assets owned by foreigners plus the total of all foreign assets owned B) the total of all foreign assets owned by residents of the home country times the total of all C) the total of all domestic assets owned by foreigners minus the total of all foreign assets owned D) the total of all foreign assets owned by residents of the home country minus the total of all by residents of the home country domestic assets owned by foreigners. by residents of the home country domestic assets owned by foreigners

Explanation / Answer

18. Example of excessive debt for the United states is A loan made in yen to a company in the United states.

19. It can reduce the chance of crisis is not a problem of excessive debt.

20. Borrowed funds are always used in a manner that contributes to the expansion of the country's productive capability.

21. The international investment position is defined as the total of all domestic assets owned by foreigners minus the total of all foreign assets owned by residents of the home country.

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