National Debt

Definition

National debt refers to the total amount of money that a government owes to its creditors as a result of accumulated budget deficits over time. It represents the overall financial obligations of a country.

Related terms

Budget Deficits: Occur when government spending exceeds revenue collected during a specific period, leading to an increase in national debt.

Treasury Bonds: Securities issued by governments as a way to borrow money from individuals or institutions with fixed interest rates and maturity dates.

Debt-to-GDP Ratio: A measure comparing the size of a country's national debt relative to its gross domestic product (GDP), indicating its ability to repay debts.