What is Debt Service ?
Correct answer: D. Both of them
- A. Interest payments on external debts
- B. repayments of external debt
- C. none of these
- D. Both of them
Explanation
Debt service covers both the interest due on a loan and repayment of its principal. Therefore, interest payments and repayments together form debt service.
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Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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