A government can finance its spending by:

Question

Quizplus · Accepted Answer

Selling bonds is a way for the government to finance its spending by borrowing from the public. When the bonds are sold, investors buy them with the understanding that the government will pay them back with interest at a later date. This can be a cost-effective way for the government to raise large amounts of money quickly, but it also increases the overall debt of the country. The other options listed - buying bonds, decreasing interest rates, and cutting taxes - are all tools that the government can use to influence the economy, but they do not directly finance government spending.

A Government Can Finance Its Spending By