ICSE Class 10 Answered

When the planned expenditure of the government of a country exceeds its total revenue, the government has to borrow money from various organisations and individuals. This is called public debt.

Three sources of public borrowings are:

1. Individual buys government bonds and other types of securities.
2. Banks buy government bonds and are forced to hold securities in proportion to their deposits. 
3. Raising loans from international agencies like the International Monetary Fund, World Bank, etc.