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- Why would the private sector purchase government debt?How does the federal government finance a budget deficit? It prints more money. It purchases U.S. Treasury bonds. It cuts spending on entitlement programs. It borrows funds by selling Treasury bonds.Why do the creditors generally charge higher interest rates on new borrowing?
- The government needs to pay out 350 billion dollars more in Social Security benefits than it collects and Social Security taxes. What are the options for finding this money?Name and describe two different ways the government takes in money (revenue).the government has higher debt and higher bond yields, then it can cause increased costs of borrowing
