`35- why does government not have any repay debt, as do private individuals a. b
ID: 1214072 • Letter: #
Question
`35- why does government not have any repay debt, as do private individuals
a. because government can ignore creditors and refuse payments
b. because the government as a dictatorship, is unresponsive to demand for repayment
c. becaue the government has no bet, it owes it to itself
d. because the government does not have a finite life, as do individuals
41-countries that expand their money supply too rapidly
experience a high inflation rate
experience a depreciating currency
experience a rapid increase in output
a and b, but not c
19- Reserve demanded varies
inversely with both prices and output
inversely with prices and directly with output
directly with prices and inversely with output
directly with both prices and output
21. the correct chain of causation illustrating the effects of money policy is
a. money interest rates, C +I +G +(X-IM), I.
b. money , interest rates, I, C+I+G+(X-IM)
c. C+I+G+(X-IM), I, interest rates, money
d. I, C+I+G+(X-IM), money, interest rates
43- country can maintain its exchange rate fixed only
if it fixes interest rates
if it fixes prices
if it has enough foreign exchange to satisfy the demand at the fixed rate
if it relies on capital flows
Explanation / Answer
35.
Correct Answer:
d. because the government does not have a finite life, as do individuals
Explanation:
The government is represented and run by elected members and they are supported by different government bodies. Thus, it has infinite life to carry on the debt, it has taken from individuals as well as institutions. With a change of government, debt does not wipe out. It is simply managed by another set of elected members.
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