Question

How does the government benefit when individuals purchase government bonds or treasury bills?

A) By increasing the national debt
B) By decreasing government revenue
C) By gaining funds for various public expenditures
D) By lowering interest rates on existing debts

Answer 1

The government benefits when individuals purchase government bonds or treasury bills by gaining funds for various public expenditures, such as infrastructure projects, education, and healthcare.

Step-by-step explanation:

When individuals purchase government bonds or treasury bills, the government benefits by gaining funds for various public expenditures.

These funds can be used to pay down the national debt or be refunded to taxpayers.

For example, the government can use the funds raised from selling treasury bills to finance infrastructure projects, education, healthcare, and other public services, which ultimately benefit the citizens and the economy.