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In the USA it is Congress. They have to pass legislation to authorize the government to borrow more money (raise the debt ceiling). Indirectly the Federal Reserve and the market also put a cap on it since the ability to borrow depends on the interest rate that must be paid on any bonds issued by the government. Higher interest rates set by the Fed cause the interest rates that must be paid on government bonds to have to be higher to actually sell. The market also determines what interest rate will be required to sell all the bonds - the less demand there is for the bonds, the higher the interest rate has to be in order to make them attractive enough to sell and the better the yields on other potential investments, the higher the interest rates have to be in order to be sufficiently competitive. The higher the interest rates, the more difficult it is to get approval to borrow.
What else can I help you with?
A government borrowing money is an example of which type of power?
Concurrent Powers
The government creates income from which of these?
taxes
If a government wanted to expand its capital resources it could?
lower interest rates to make borrowing money easier.
A government creates an army Which purpose of government is it fulfilling?
Protection is the purpose of government served by military forces.
How does the principle of federalism affect the US government?
By dividing some responsibilities between the federal and state governments
Who creates caps on government borrowing?
congress
Who is responsible for the federal government borrowing?
bobo
What creates local government?
The State Government Creates the Local govt. The Federal creates The State!
How a government might finance its expenditure?
tax, revenue from government enterprises and tariffs, government borrowing, selling government businesses.
When did the US government start borrowing money from China?
The Iraq War
Which branch of government is in charge borrowing and spending money in the US?
Congress
Why is government borrowing from trust funds different from privately-owned debt?
Government borrowing from trust funds, such as Social Security or Medicare, differs from privately-owned debt because it involves internal transactions within the government rather than borrowing from external entities. Trust fund borrowing is essentially a way to reallocate funds that have already been collected from taxpayers, while privately-owned debt involves obligations to external lenders or investors. Additionally, trust fund borrowing does not impact the government’s overall debt burden in the same way as borrowing from private sources, as it reflects a commitment to future payment rather than a cash outflow.
The federal budget deficit is found by?
Subtracting government tax revenue plus government borrowing from government spending in a particular year.
Who creates government?
State Government
A government borrowing money is an example of which type of power?
Concurrent Powers
How is government funded and raises money?
through taxes and borrowing from other countries
To what extent should government borrowing be a cause for concern?
Government borrowing can be a concern when it leads to unsustainable debt levels, potentially hindering economic growth and increasing the risk of default. However, borrowing can be justified if it finances productive investments that stimulate the economy. The key is to maintain a balance, ensuring that debt remains manageable relative to GDP and that borrowing serves long-term economic goals rather than merely funding current expenditures. Ultimately, the implications of government borrowing depend on the context, including interest rates, economic conditions, and the purpose of the debt.
