Reading Comprehension - Public Debt

Develop your reading skills. Read the following text and do the comprehension questions

Public Debt

Government debt refers to the money owed at any given time by any government. This may include public debt owed by the federal government, the state government, or the municipal and local government. Public debt increases when government spends more money than it collects in taxation. This leads to "government deficit" which refers to the difference between government receipts and spending in a single year, that is, the increase of debt over a particular year.

Government debt is also called public debt, national debt or sovereign debt. Government debt can be categorized as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders). Another common division of government debt is by duration until repayment is due. Short term debt is generally considered to be for one year or less, long term is for more than ten years. Medium term debt falls between these two boundaries.

A broader definition of government debt considers all government liabilities, including future pension payments and payments for goods and services the government has contracted but not yet paid.

Source: Wikipedia


  1. Government debt is money owed by individuals
    a. True
    b. False
  2. Government deficit refers an excess of expenditures over revenues during a certain period.
    a. True
    b. False
  3. One classification of government debt includes a division between internal and external debt.
    a. True
    b. False

Related material:

Idioms about money and business
Public Debt
Economic recession
The Great Depression
Banking vocabulary
Vocabulary about economic recession