Fiscal policy is primarily aimed at stabilizing the economy by managing government spending and taxation to influence economic activity.

Income tax is the primary source of government revenue in many countries, as it is levied on the earnings of individuals and businesses.

Budget deficit occurs when government expenditure exceeds revenue, resulting in a negative fiscal balance.

Issuing treasury bills is a common method for governments to borrow money from investors to finance budget deficits.

Public debt represents the cumulative amount of money borrowed by a government over time, including both domestic and foreign debt.

High levels of public debt can increase the risk of default, where a government is unable to meet its debt obligations.

Increasing taxes is a common method for governments to generate additional revenue and reduce public debt.

Debt-to-GDP ratio is a key indicator of a country's debt burden relative to the size of its economy.

High public debt can lead to higher interest rates, which can discourage investment and economic growth.

Debt refinancing involves replacing short-term debt with long-term debt, typically at a lower interest rate.

Public debt can allow governments to increase spending on infrastructure, education, and other public services.

Insolvency occurs when a government's liabilities exceed its assets, making it unable to meet its financial obligations.

High public debt can lead to increased inflation, as governments may resort to printing money to finance their spending.

Debt reduction refers to the process of actively reducing the outstanding amount of public debt.

High public debt can lead to reduced government spending, as governments may need to cut expenditures to reduce their fiscal deficit.