The legal basis of state credit
Answers are for parents and teachers.
1
Write two differences between credit and tax.
Credit is repaid and voluntary; tax is not repaid and is compulsory.
2
How many so‘m of income does a 3,000,000 so‘m bond at 6 percent simple annual interest give in 1 year?
180000
3
Why must a state loan be “voluntary”? Write briefly.
Because people and organisations lend of their own will; taking money by force would be tax or confiscation, not credit.
4
Name two situations in which the state may need to borrow.
Covering a budget deficit; financing large infrastructure programmes.
5
Write a 3-sentence explanation using the words state loan, bond and interest.
The state raises money through a loan. The lender receives a bond. At the end of the term the debt is repaid with interest.