Sovereign deficits are financed by

Question

Quizplus · Accepted Answer

Governments finance their deficits by borrowing, usually by issuing bonds. This means that individuals, organizations, and other governments buy these bonds and essentially lend money to the government. It is not ideal for governments to finance their deficits by printing money as it can lead to inflation. Issuing shares is not a common practice for governments and paying off debts is not a way to finance deficits, as paying off debt means reducing deficits.

Sovereign Deficits Are Financed by