The federal debt consists of all the money borrowed over the years by the national government that is still outstanding. It includes treasury bills, notes and bonds issued by the U.S. Department of Treasury to finance the government’s operations, such as defense, social programs, and infrastructure projects. The debt has to be paid back with interest, which puts a strain on the government’s budget and affects future generations’ livelihoods.

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The Federal Debt

Question 16

Multiple Choice

The federal debt

A) consists of all the money borrowed over the years by the national government that is still outstanding.
B) is money owed to foreign nations by the United States government.
C) is all money borrowed over the years by the federal government and owed to state governments.
D) is the difference between the amount of annual tax receipts and government expenditures.
E) is money owed by taxpayers to the United States government but never paid.

Correct Answer: