A simplest method of liquidating a debt b it will

a) Simplest method of liquidating a debt.
*b) It will increase the credibility of the government.
c) Debtors may face loss.
d) It is discriminating
6. Pick out the feature which is not true of a capital levy.
a) For paying off unproductive debt.
b) It is paid by those who earn huge profits.

*c) It does not follow the principle of equity.
d) It helps to fight inflation.
7. Productive debts are utilized for .........
a) Transfer payments in form of subsidies
*b) They are raised for financing wars
c) They add to productive capacity of the economy
d) special incentives to weaker sections
8. External debts can be raised from ...........
a) Individuals
b) Central Bank
c) Commercial Banks
*d) World Bank
9. The treasury bills are issued by RBI on behalf of the government
*a) Short-term public debt
b) Medium-term public debt
c) Long-term public
d) None of the above
10. Debts that are repaid at some specific future date are known as
*a) Redeemable debts
b) Irredeemable debts
c) Treasury Bill
d) None of the above
11. The public debt is the total amount of
a. debt held by the public
*b. government securities held by individuals, businesses, government agencies, and the Federal
Reserve
c. demand deposits held by banks
d. outstanding commercial loans
e. outstanding mortgages
12. The level of external debt rises when the Bank of Ghana
a. prints more money
b. sells securities to Americans
c. increases the deficit
d. decreases the deficit
*e. sells securities to foreigners
13. The national debt is a burden to future generations to the extent that a portion of the debt is held by
*a. foreigners
b. government institutions like the Social Security trust fund
c. insurance companies
d. national banks

e. pension funds
14. A potential problem with the accumulation of a public debt that results from running deficit
budgets each year is that
a. financing the deficit may become more difficult each year because the nation's credit
deteriorates
b. interest rates have to be kept low so that the government can afford to borrow
c. the deficit may climb to very high levels as a percentage of GDP
*d. a high interest rate may have to be paid by government, which crowds out private investment
e. private investment is always more efficient than the public investment associated with deficit
spending
15. Arranged from shortest to the longest time to maturity, the government securities are
*a. Treasury bills, Treasury notes, Treasury bonds
b. Treasury notes, Treasury bills, Treasury bonds
c. Treasury bonds, Treasury notes, Treasury bills
d. Treasury bonds, Treasury bills, Treasury notes
e. Treasury bills, Treasury bonds, Treasury notes
16. One way that the Ghana’s external debt could be reduced is for
a. taxes to be decreased
b. investment to increase
*c. the government to buy up bonds that are held by foreigners
d. government spending to increase
e. the government to sell bonds in foreign markets
17. _______ arises when governments borrow, when their expenditure is more than revenue
*a) Public debts
b) Public revenue
c) Public expenses
d) None of these
18. Which of the following consists of the total or accumulated borrowings by the government?