--%>

Retiring an internally held debt and externally held debt

Contrast the influence of retiring an internally held debt and externally held debt.

E

Expert

Verified

Paying off an internally held debt would include buying back government bonds.  It could present a difficulty of income distribution since holders of the government bonds normally have higher incomes than the average taxpayer.  However paying off an internally held debt would not burden the economy like a whole—the money utilized to pay off the debt would keep on within the domestic economy.  In paying off an externally held debt, people abroad could utilize the proceeds of the bonds sales to buy products or other assets from the Canada.  However, the dollars gained could be simply exchanged for foreign currency & brought back to their home country.  It decrease Canada’s foreign reserves holdings & may lower dollar exchange rate.

   Related Questions in Finance Basics

  • Q : How does preemptive right secure

    How does a preemptive right secure the interests of present stockholders? A preemptive right secure the interests of existing stockholders through giving them the chance to preempt other investors into the purchase of new shares. If these right

  • Q : Measuring net output GDP in a specific

    Why do national income accountants comprise only final goods in measuring net output GDP in a specific year? Why don't they comprise the value of stocks and bonds bought & sold? Why don't they comprise the value of utilized furniture bought and so

  • Q : What is the Character of Expenditure

    Character of Expenditure: A classification recognizing the major purpose of expenditure, like State Operations, Local Assistance, Capital Outlay, or Unclassified.

  • Q : What is an Element Element : It is a

    Element: It is a subdivision of a budgetary program and the second stage of the program structure in the Uniform Codes Manual.

  • Q : The official unemployment rate Normal 0

    Normal 0 false false

  • Q : Define May Revision May Revision : The

    May Revision: The annual update to the Governor’s Budget having a revised estimate of General Fund revenues for the present and ensuing fiscal years, any proposals to adjust expenditures to reflect the updated revenue estimates,

  • Q : State Section 1.80 Section 1.80 : The

    Section 1.80: The section of Budget Act which comprises the periods of accessibility for Budget Act appropriations.

  • Q : Meaning of invisible hand Normal 0

    Normal 0 false false

  • Q : Demand for French euros or a supply of

    Normal 0 false false

  • Q : Describe Treasury bill Describe

    Describe Treasury bill? How risky is it?Treasury bills are short term debt instruments issued through the U.S. Treasury which are sold at a discount and pay face value at maturity.  They are very close to risk-free as they are backed throug