Which could be sources of funding for a government that wants to increase government expenditures?
A) taxes only
B) borrowing only
C) both taxes and borrowing
D) neither taxes nor borrowing

Question

Quizplus · Accepted Answer

If a government wants to increase government expenditures, it will need to obtain more money than it currently has. The two primary ways to do this are through taxes and borrowing. Taxes directly generate revenue for the government, while borrowing allows the government to obtain funds from lenders with the promise of paying back the money with interest. Therefore, both taxes and borrowing would be necessary sources of funding for a government wanting to increase expenditures. Options A and B are not sufficient on their own, and option D is not feasible as the government cannot increase spending without obtaining more funds.

Which Could Be Sources of Funding for a Government That