What is an appropriate reason for the government to borrow money?
A)To compensate for a lower bond rating.
B)To encourage foreign ownership of the debt.
C)To inject new spending into the economy.
D)To discourage waste in fiscal affairs.

Question

Quizplus · Accepted Answer

The most appropriate reason for the government to borrow money is to inject new spending into the economy. This can help to stimulate economic growth and create jobs, which can ultimately lead to increased tax revenues for the government to pay off the debt. Borrowing money to compensate for a lower bond rating or to encourage foreign ownership of the debt may not be the best use of funds, and borrowing money to discourage waste in fiscal affairs is not a valid reason for borrowing.

What Is an Appropriate Reason for the Government to Borrow