Inflation And Public Debt Essay

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CHAPTER 1 INTRODUCTION 1.1 Background of Study

Public debt is a debt owned by the central government. It can also be known as government debt or national debt. Public debt is one of the financing alternatives used by government to finance its operation. Government borrows fund by issuing securities, bills, notes and government bonds. Other matter that related to the government debt is the maturity date of repayment. Generally, short term debt is in within one year or less while the long term debt is in ten years and above. Intermediate term of repayment is in between one year to ten years.

1.2 Problem Statement

A country needs funds to exercise the economic activities and generates income from it. The crisis started when the expenses …show more content…

Does external debt affect the public debt in Malaysia?
3. Does inflation influence public debt in Malaysia?

1.4 Research Objectives

1. To examine the effect of foreign direct investment on public debt in Malaysia. 2. To investigate the effect of external debt on public debt in Malaysia. 3. To ascertain the effect of inflation on Malaysia’s Public debt.

1.5 Significance of Study

This study would give massive benefit to government, policy makers, students, accountants, private sectors and to society as whole.

At first, this study would help the government, policy makers and accountants to analyze the level of debt in the nation and factors that influence the public debt in Malaysia. Thus, they can implement strategies to reduce the country’s debt.

Secondly, this research can be use as guideline to students who wish to make further research on this topic in the future. Last but not least, private investors and society can gain benefit from this research by getting information related to debt and the country 's economic condition.

1.6 Limitation of Study

Data constraint

Some of the data are not complete and insufficient. The research is limited to 30 years because of non-availability of data beyond the year of 1980. Another restriction, the online data is very difficult to get because the data require subscriptions and

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