Question

What is a major difference between the way households and countries manage

debt?
A. Only households have a limited lifespan and attempt to pay off their debt at some point.
B. Only governments refinance debt by borrowing.
C. Only households use debt to invest for the future.
D. Only governments use deficit spending to buy goods and services they can't afford now.

Answer 1

A major difference between the way households and countries manage debt is that only governments use deficit spending to buy goods and services they can't afford now. Therefore, the correct option is D.

Step-by-step explanation:

A major difference between the way households and countries manage debt is that only governments use deficit spending to buy goods and services they can't afford now. Governments spend more money than they collect in taxes, resulting in a budget deficit. They then borrow money to cover the deficit. This is different from households, who use debt for various purposes such as buying houses or cars, paying for medical expenses or college tuition, and investing for the future.