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svetoff [14.1K]
4 years ago
7

Why is it an important to note who holds the debt when comparing debt-to-GDP ratios among countries? Lower levels of external de

bt create a greater threat of global instability. Higher levels of external debt create a lower threat of global instability. Higher levels of external debt create a greater threat of global instability. Lower levels of external debt create higher interest rates.
Business
1 answer:
Jobisdone [24]4 years ago
7 0

Answer:

Higher levels of external debt create a greater threat of global instability.

Explanation:

External debt is the sum of one country's obligations to another, which is composed of public debt (contracted by the state of the country) and private or private sector debt (contracted by individuals abroad).

Foreign debt to other countries is often given through agencies such as the International Monetary Fund or the World Bank. If the debtor has trouble paying it off, it can be a serious problem for the economic development of a country, and even for its autonomy.

In principle, debt is not bad, because it allows nations to conserve their own resources and receive external resources to exploit, process or produce new goods and services. However, it becomes a problem when the debt is not actually used for the requested purpose or the repayment conditions harden. Then it can become one of the causes of underdevelopment rather than a way to solve it.

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3 years ago
A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is
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Answer:

If the yield to maturity remains at 8%, then the bond's price will decline over the next year.

Explanation:

When the bonds sells at a premium it means that the coupon payment is greater than the yield to maturity, which means that the income generated by the bond is greater than return required by the investor and because of this the bond sells at a premium because the investor is willing to pay more for the bond as it offers more income than its required rate of return. With a premium the bond price increases to a point where the coupon and required return become equal. When the bond has 10 years to maturity it means that it will give 10 equal payments to the investor which will be greater than the investors required return therefore the investor will be willing to pay a higher price for the bond, as the maturity decreases the number of payments which will be higher than the required return also decrease, so for example if there are 5 years to maturity then the bond will pay 5 payments that are greater than the required return so the investor will be paying a lower premium compared to when he was getting 10 payments that payed more than his required return.

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3 years ago
Does the amount of effort that you put into your courses increase or decrease the marginal cost of your education? Explain your
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The amount of effort that you put into your courses increases the marginal

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3 years ago
During the deep recessions of the early 1980s and of 2007-2009, unemployment reached roughly __________.
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<u>Production</u> refers to the manufacturing process that includes the transformation of raw materials resulting in finished products.

<h3>What is production?</h3>

It is the supply chain phase that includes all the processes related to the creation and elaboration of the product.

That is, it includes the operations necessary for the transformation of raw materials into products and their mass production.

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