In 2011, an article in the Economist argued that "heavy public debt risks more than just crowding out private investments It can, in the extreme, bring on insolvency." Source: "Running Out of Road," Economist, June 16, 2011. What does the article mean by "heavy public debts"? OA. A total value of government bonds outstanding that is large relative to GDP OB. High amounts of negative equity among households and firms OC. Values of borrowing by households that are large relative to household incomes OD. Government expenditures that far exceed government tax revenue in a given year How might heavy public debts lead to insolvency?

In 2011, an article in the Economist argued that "heavy public debt risks more than just crowding out private investments It can, in the extreme, bring on insolvency." Source: "Running Out of Road," Economist, June 16, 2011. What does the article mean by "heavy public debts"? OA. A total value of government bonds outstanding that is large relative to GDP OB. High amounts of negative equity among households and firms OC. Values of borrowing by households that are large relative to household incomes OD. Government expenditures that far exceed government tax revenue in a given year How might heavy public debts lead to insolvency?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 51P: A government starts off with a total debt of $3.5 billion. In year one, the government runs a...

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OMAN'S ECONOMIC UPDATE Excerpt from The World Bank (October 2020) Similar to most economies all over the world, "the economy of Oman contracted sharply in 2020 amid the weakness of oil prices and the disruptions from COVID-19. Fiscal and external deficits will remain under immense strain due to prolonged low oil and gas prices, elevating public and external debt. Key risks to the outlook are prolonged low oil prices, which will induce high external borrowing needs, and lack of impetus for private sector job creation that does not depend on government spending. The drop in oil prices and COVID-19 are placing unprecedented strain on Oman's economy. While no official data are available yet on the economy in 2020, preliminary data issued by the authorities indicate that Oman's nominal GDP has contracted by 3.9% in Q1/2020 (y/y); non-oil activities contracted by over 6%. Inflation has reached negative territory with -0.4% (y/y) in Q2/2020 reflecting weak domestic demand. The sharp drop in…
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