External debt represents a claim of __________ against the real income (GNP) of the country.

countrymen

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foreigners

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both A and B

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none of the above

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Solution

The correct option is C foreigners
Public borrowings from other countries, are referred to as External Debt. External debt permits import of real resources. It enables the country to consume more than it produces. The sources of external debts are loans from foreign government, IMF, World Bank etc.

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Similar questions

Which of the following is the effect on net income, if a business creates a provision for doubtful debts?

Consider the following statements: -

1. National disposable income includes Net National Product at Market prices only.

2. GDP is a measure of National Income/ National output and National expenditure produced in a particular country.

3. GNP includes the value of all goods and services produced by nationals whether in the country a abroad.

4. GNP does not include dividends and interest from abroad in Income.

Which of the above statements is are correct?

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