Question

Which statement best describes some of the components of externally held debt?

Mutual funds held by individuals, both foreign and domestic.

Public debt held by U.S. banks, firms, and individuals.

Public debt held by foreign individuals and entities.

Debt held by foreign and U.S. banks and firms, but not foreign or domestic individuals.

Answer 1

Answer:

Public debt held by foreign individuals and entities.

Explanation:

Public debt is defined as falling into one of two categories: internally held debt and externally held debt. Internally held debt is public debt held by U.S. banks, firms, and individuals. Externally held debt is public debt held by foreign individuals and entities.  Note that this kind of debt is held only by the foreign nationals whether they are banks or financial institutions or even individuals.