What term describes debt issued by the government to raise money for public projects?

What term describes debt issued by the government to raise money for public projects?

• A. Government Bonds
• B. Municipal Bonds
• C. Corporate Bonds
• D. Agency Bonds

Answer: (A)

Debt issued by the government to finance public projects is called government bonds. The government borrows by selling these bonds and promises to pay periodic interest and return the principal at maturity. This type of debt is typically seen as very safe because it’s backed by the government’s credit. Municipal bonds are issued by states or municipalities for local projects and may offer tax advantages. Corporate bonds are issued by companies to raise capital and carry higher credit risk. Agency bonds come from government-sponsored entities and may have different guarantees, but they aren’t the same as direct government debt.

Debt issued by the government to finance public projects is called government bonds. The government borrows by selling these bonds and promises to pay periodic interest and return the principal at maturity. This type of debt is typically seen as very safe because it’s backed by the government’s credit. Municipal bonds are issued by states or municipalities for local projects and may offer tax advantages. Corporate bonds are issued by companies to raise capital and carry higher credit risk. Agency bonds come from government-sponsored entities and may have different guarantees, but they aren’t the same as direct government debt.