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 warsc) They add to productive capacity of the economyd) special incentives to weaker sections 8.External debts can be raised from ...........a) Individuals b) Central Bankc) 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 debtc) 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 debtsc) Treasury Billd) None of the above11. The public debt is the total amount ofa. debt held by the public*b. government securities held by individuals, businesses, government agencies, and the Federal Reservec. demand deposits held by banksd. outstanding commercial loanse. outstanding mortgages12. The level of external debt rises when the Bank of Ghanaa. prints more moneyb. sells securities to Americansc. increases the deficitd. decreases the deficit*e. sells securities to foreigners13. The national debt is a burden to future generations to the extent that a portion of the debt is held by*a. foreignersb. government institutions like the Social Security trust fundc. insurance companiesd. national banks
e. pension funds14. A potential problem with the accumulation of a public debt that results from running deficit budgets each year is thata. financing the deficit may become more difficult each year because the nation's credit deterioratesb. interest rates have to be kept low so that the government can afford to borrowc. 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 investmente. private investment is always more efficient than the public investment associated with deficit spending15. Arranged from shortest to the longest time to maturity, the government securities are*a. Treasury bills, Treasury notes, Treasury bondsb. Treasury notes, Treasury bills, Treasury bondsc. Treasury bonds, Treasury notes, Treasury billsd. Treasury bonds, Treasury bills, Treasury notese. Treasury bills, Treasury bonds, Treasury notes16. One way that the Ghana’s external debt could be reduced is fora. taxes to be decreasedb. investment to increase*c. the government to buy up bonds that are held by foreignersd. government spending to increasee. the government to sell bonds in foreign markets17. _______ arises when governments borrow, when their expenditure is more than revenue*a) Public debtsb) Public revenuec) Public expensesd) None of these18. Which of the following consists of the total or accumulated borrowings by the government?