Govt borrowing

Question 1

What is Public sector Borrowing requirement

Answer 1

If the govt spends more than it receives (Budget deficit) it will have to borrow to make up for the short fall, the amt the govt needs to borrow in a given time period is called the Public Sector borrowing requirement

Question 2

What does PSBR include

Answer 2

Borrowing from central gov, local gov, and public corporations like T&Tec

Question 3

How can the PSBR be met

Answer 3

-Central bank printing more money
- The govt borrowing from local or overseas sources
- The central bank selling govt. treasury bills and notes or bonds

Question 4

What is national debt or public sector debt

Answer 4

This is the debt accumulated by the govt over time. It represents the total amt owed by the govt to its citizens, which is a domstic debt as well as the amt owed to foreigners which is external debt

Question 5

National Debt =

Answer 5

external debt + domestic debt

Question 6

Debt to GDP ratio

Answer 6

National Debt/ GDP