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Government Bonds

Government Bonds is special type of debt which is taken by government by issuing bonds. It is the document which is given to those people who gives loan to government. In this bonds government promises to repay at its maturity with interest. In other words, these are fixed-income debt securities issued by the government. It is included in Public finance because indirectly its repayment burden will be on public.

Let’s me explain:-

Suppose, Govt. of India has taken loan from USA $1 Million Dollar for productive work. In local currency, its value is Rs. 4500,000. At the time of repayment, Government of India can take further loan from public or issuing new loan or increase the rate of tax. All these will increase the financial burden on public of India. Yesterday, you have read “what is seigniorage?” In this content, I have explained how can government earn money by issuing new notes and create more burden on public. Same thing is for government bonds.

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Accounting Education: Government Bonds
Government Bonds
Accounting Education
https://www.svtuition.org/2010/03/government-bonds.html
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