Question

Statement (1): Public debt repayable within one year is a short term debt.

Statement (2): Long term loans are paid back in 5 years or more.

Options

• Both statements are true.

• Both statements are false.

• Statement 1 is true but Statement 2 is false.

• Statement 2 is true but Statement 1 is false.

Answer 1

Both statements are true.

Explanation:

• Statement (1): Short-term public debt is defined explicitly as having a maturity duration of less than twelve months and meeting the government's immediate cash-flow requirements.
• Statement (2): Long-term debt is used for multi-year capital projects, with repayment terms of five years or more.