Financing wartime expenditures by increasing internally held public debt permits a nation to defer a part of the economic cost of war.

True / False.

TRUE

Explanation:

Governments have the prerogative of financing their domestic debt through the sale of public securities in the capital market. This can serve as a strategy for various emergency or non-emergency situations, such as wars or infrastructure investment, among others. This is a way to extend expenses. However, sooner or later, the bill will arrive, so this strategy should be taken with caution to avoid a future fiscal crisis or even a moratorium that occurs when a government loses its debt repayment capacity.