Government debt is primarily used to finance government spending, such as infrastructure projects, social programs, and defense.

Government debt, national debt, and public debt all refer to the total amount of money that a government owes to its creditors.

Fiscal policy uses government spending, taxation, and interest rates to influence the economy.

During an economic recession, fiscal policy aims to increase government spending to stimulate economic activity.

During an economic expansion, fiscal policy aims to decrease government spending to prevent inflation.

Fiscal deficit is the difference between government revenue and government spending.

Budget surplus is a situation where government revenue exceeds government spending.

Debt-to-GDP ratio is the ratio of government debt to gross domestic product (GDP).

A high debt-to-GDP ratio can lead to inflation, economic growth, and interest rates.

Crowding out is the trade-off between government debt and economic growth.

Crowding out is the situation where government borrowing leads to higher interest rates and reduced private investment.

Fiscal sustainability is the situation where government debt is sustainable in the long run.

The sustainability of government debt is determined by economic growth, inflation, and interest rates.

The primary challenges associated with managing government debt include balancing fiscal sustainability and economic growth, avoiding crowding out, and maintaining investor confidence.

The primary policy options for managing government debt include fiscal consolidation, debt restructuring, and default.