12.2k views
2 votes
In one or two sentences, explain how a government pays for expenses that are more than its revenues

User Sumithran
by
5.5k points

2 Answers

0 votes
The government pays for it;s expenses that are more than its revenues by borrowing from foreign countries. Although they do pay interest until they are able to pay such back. 
User Boobalan
by
5.5k points
1 vote

Answer: It is also possible to add that governments pay for their expenses by borrowing money from a wide diversity of people, both domestically and internationally, known as "the public," as well as from local governments and domestic investors, among others.

Explanation: In the United States, for instance, the Treasury sells bonds and other financial assets that everybody can purchase - these days it is even possible to do it online. By doing so, the Treasury, on behalf of the government, borrows money that later on it will return to the investors with interest. Countries such as China and Japan hold the largest amount of U.S. debt currently.

User Abdullah Javed
by
5.8k points