Question #2

Bonds have to be issued by the national governments

• to finance the budget deficit if the government is worried about "money creation".
• if the central bank desires to maintain a constant short-term target interest rate and net government spending is rising. (note comments)
• if taxation revenue falls in a recession and the government wants to introduce a stimulus package.

Answer #38

Answer: if the central bank desires to maintain a constant short-term target interest rate and net government spending is rising. (note comments)

Explanation

Please read Deficit spending 101 - Part 3 if you are still wondering why!