Public debt is primarily used to finance government spending when tax revenues are insufficient to cover expenditures.

Corporate bonds are issued by private companies, while Treasury bonds, Municipal bonds, and Treasury bills are all types of public debt.

Internal public debt is owed to domestic lenders within the country, while external public debt is owed to foreign lenders outside the country.

The effect of public debt on interest rates depends on factors such as the size of the debt, the economic conditions, and the monetary policy of the central bank.

Crowding out occurs when the government borrows money, leading to higher interest rates, which makes it more expensive for businesses to borrow money, resulting in reduced private investment.

A high public debt can increase the risk of default, lead to higher inflation, and reduce economic growth.

The fiscal gap is the difference between the present value of future tax revenues and the present value of future government spending.

The primary objective of fiscal policy in managing public debt is to reduce the fiscal deficit, which is the difference between government spending and tax revenues.

Debt cancellation is not a method of managing public debt, as it involves forgiving the debt rather than managing it.

A fiscal crisis occurs when the government's debt payments exceed its tax revenues, leading to a situation where it cannot meet its financial obligations.

Reducing income inequality is not a potential benefit of public debt, as it typically has no direct impact on income distribution.

A fiscal surplus occurs when the government's tax revenues exceed its debt payments, leading to a positive balance in its budget.

Increased government spending is not a potential risk associated with public debt, as it is the primary purpose of issuing public debt.

A fiscal balance occurs when the government's debt payments are equal to its tax revenues, resulting in a balanced budget.

Debt monetization, which involves the central bank creating money to purchase government debt, is not a sustainable strategy for reducing public debt in the long run.